Working in the United States has two different variants. You can work for a company or business or you can be self-employed. Social Security is paid in both cases, but working for a company it is the company that pays Social Security and the IRS. If you are self-employed, you must make these payments individually.
During the pandemic many workers lost their jobs in companies. That is why many people started working as self-employed, thus paying their own Social Security. If you are in this case, you should know that it is necessary to pay all taxes to avoid problems with the law. Here we will teach you how to know which are those taxes that you must pay.
There is a very specific way to operate and pay this Social Security. It is a very important responsibility as a United States citizen because it allows you to be a full member of society. It also allows you to be a functioning member of the community.
How can you get Social Security benefits while self-employed?
The first thing you should do is recognize whether you are self-employed or not. Knowing this is easy. If you have your own business, you are self-employed and must pay your Social Security and Hacienda taxes every year. This must be done on a mandatory basis, otherwise you may find yourself in trouble. Anyone who delays paying their taxes will have to pay more taxes.
If you earn more than $400 a year, regardless of activity, you must file a federal income tax return in the Schedule SE. This return goes to Social Security. It does not matter if you work as a salesperson or if you have a business with partners. It is mandatory to declare all this money in order to pay taxes every year.
First I pay taxes, and then what?
If you have paid your Social Security and tax as a self-employed person for the entire time you have been working, you should have no problems. When your retirement time comes, the calculation can be the same as if you have worked for a company. Remember that 62 is the minimum age for retirement, although you will not receive 100% of what you are entitled to.
In any case, you can always ask an advisor to help you with all the documentation. He or she can also help you with the application for the retirement benefit at the Social Security if you do not know how to apply for it when you are self-employed. The documents are almost the same, but it is always better to have a little benefit to avoid making mistakes.