You are self-employed if you operate a trade, business or profession, either by yourself or as a partner.

You report your earnings for Social Security when you file your federal income tax return.

If your net earnings are $400 or more in any year, you must report your earnings on Schedule SE for Social Security purposes, in addition to the other tax forms you must file. You pay your Social Security and Medicare taxes along with your income tax.

What Are "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 as earnings for Social Security. When you figure your net earnings you should not include:  

  • 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 you regularly provide services mostly for the convenience of the occupant; or
  • Income received from a limited partnership.

For more information, please read our If You Are Self-Employed fact sheet.