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Self-Employment and Social Security Disability

by | Jan 13, 2016 | Social Security Disability |

Self-Employment and Social Security Disability

Self-Employment is defined as those who operate a trade, business, or profession either by yourself or with a partner. For most workers, employers deduct Social Security taxes from their paycheck and report an employee’s wages to the Social Security Administration. However, if you are self-employed and your net earnings are $400 or more in a year, you must report your earnings on Schedule SE, in addition to the other tax forms that you must file. If you are self-employed, you must pay the combined employee and employer amount, which is a 12.4 percent Social Security tax on up to $118,500 of your net earnings and a 2.9 percent Medicare tax on your entire net earnings.

It is important that a self-employed individual pay Social Security taxes. In order to qualify for Social Security disability benefits, an individual must have worked and paid Social Security taxes for a certain period of time, usually 10 years of work or 40 credits. In 2015, if your net earnings were $4,880 or more, you would earn the yearly maximum of four credits. In addition, your earnings are used to determine the amount of your Social Security benefit. Reporting the maximum amount of earnings is essential in order to maximize the amount of your Social Security benefits. There are also tax deductions available to those who report self-employment earnings.

For more information on self-employment and its impact on Social Security disability, contact an experienced Social Security disability attorney at Gardberg & Kemmerly, P.C. today at 251-343-1111 for a free case evaluation. Gardberg & Kemmerly, P.C. represents Social Security disability claimants in Alabama, Mississippi, Florida, and Louisiana at all levels of the disability process from initial application to appeals to Federal Court.


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