Figuring Your Net Earnings

Net earnings for Social Security are your gross earnings from your trade or business, minus all of your allowable business deductions and depreciation.

Some income doesn't count for Social Security. Don't include the following 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.

• Income received from a limited partnership.  

How To Report Earnings

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) or Schedule F (Profit or Loss from Farming) as appropriate

• Schedule SE (Self-Employment Tax)

These forms can be obtained from the IRS website (click here to go to the IRS forms area) and most banks and post offices. Send the tax return and schedules along with your self-employment tax to the IRS.

Even if you don't owe any income tax, you must complete Form 1040 and Schedule SE to pay self-employment Social Security tax. This is true even if you already get Social Security benefits.