Guide to Starting and Operating a Small Business | 2018 Guide to Starting and Operating a Small Business - Page 34

"credits" based on wages and net self-employment earnings. People can earn up to four Social Security credits per year, and will need earn at least 40 credits in their lifetime in order to be eligible for retirement benefits. What this means, is that self-employed people who need additional credits for Social Security purposes should file within the 3-year, 3-month, and 15-day time period. Self-employment earnings are self-reported using Schedule C (for non- farm businesses) or Schedule F (for self-employed farmers), which are included along with your Form 1040. All of your earnings covered by Social Security are used in figuring the amount of your Social Security benefit so it is important to report all of your earnings up to the maximum as required by law. Figuring Your Net Earnings Net earnings for Social Security are your gross earnings from your trade or business, minus your allowable business deductions and depreciation. Some income does not count for Social Security and should not be included in figuring your net earnings: • Dividends from shares of stock and interest on bonds, unless you receive them as a dealer in stocks and securities; • Interest from loans, unless your business is lending money; • Rentals from real estate, unless you are a real estate dealer or regularly provide services mostly for the convenience of the occupant; or • Income received from a limited partnership. How to Report Earnings. As noted on the U.S. Social Security Administration web site, you must complete the following federal tax forms by April 15 following any year in which you have net earnings of $400 or more: Form 1040 (U.S. Individual Income Tax Return); Schedule C (Profit or Loss from Business); Schedule F (Profit or Loss from Farming); Schedule SE (Self-Employment Tax). These forms can be obtained from the IRS online at www.irs.gov as well as most banks and post offices. Send the tax return and schedules along with your self-employment tax to the IRS. Even if you do not owe any income tax [H]\\]HܛH L [Y[HH^H[Y[\[X[X\]H^ \\YH][Y[H[XYH]X[X\]H[Y]ˈTXX][ۈ ^ZYH܈X[\[\[TY[HB[[X[ۜ]HY][ۘ[[[[ܛX][ۋ[H[[[H]˚\˙݈܈[ KN N KML˂[[YH^]\Έ[Z[HY[X\X^H\]HH\[\]\H\ؘ[[HYHX^HB\\وH[[\KY[H\]HH\[\]\\\\[H[XX\ܝ[\\HوB\[\ٚ]\]X\[ۈ\\]H[Y[\[]\ Y[HJK][Y[H[HH[[YB^]\H[[[XXو[H[\ܝ\[\ۈ[\YܙY[Y[ [ܙH[ܛX][ۂ܈[ܙH[ܛX][ۈX]Z[[Y[\YY \]X[X\]Hۛ[H]˚\˙݋؝\[\\X[ B\[\\\[Y[\YY [Y[\[ ]^ \X[ \X\]KX[ [YYX\K]^\Œ