self employeed income for Social security credit/quarter

Forum|Forum|11 months ago
April 6, 2025
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Please someone help. Thanks

I have regular job which does bot contribute to social security to earn a quarter. From my privoius job which contributed to earn SS quarter I ran short of one quater before I changed job. So in 2024 i did some side job to earn my last quater. My question is for this self employed situation I had to earn at least $1730 to earn that last quater so I plug all numbers on turbo tax delux 2024 tax year, " what line on SE form will tell me that my earning is above $ 1730 amount? Is SS quarter is based off QBI income? I am confuse here. Please guide me as April deadline is approching fast.

Thank you so much,

Casey

LeticiaF1

When you are self-employed, the amount that gets reported to Social Security is your net income. Your net income is your gross income minus any business expenses.

If you are looking at Schedule SE, the amount is on line 4c. If you look at Schedule C, your net income is on line 31.

Calculating Your Net Earnings From Self-Employment

[Edited 4/08/25 | 8:38 AM PST]

Casey007Author

Attn: LeticiaF1,

Thank you for great help, appreciate it. So, on form SE line 2 and schedule C line 31 will both amounts will be the same $ amount?

OK for year 2023 I had side income which was net $ 1645 for SE enough to earn my quarter as $ 1640 was required to earn a quarter but SS did not do that, when I ask SSA they said, you are still short of your last quarter. This confuses me, why what happened? That's why I wanted to clarify. Any more thoughts on this?

Another question: this is the first time I owe to IRS and for 2025 I may not owe but to expect a refund for 2025 tax year. For 2024 I will pay all, now do I still make estimated quarterly payments to avoid any tax penalty or use the "Harbour Safe" method (which is pay it all for the current year tax)

Thank you so much,

Casey

DianeW777

Yes, the same number will be on Schedule C, Line 31 and Schedule SE Line 2. However the income used by the Social Security Administration is on Schedule SE, Line 4c. (SE income x .9235). Reduced to help self employed individuals by lowering their business net profit before applying the social security or self employment tax.

Your net income based on your comments, for 2023 was $1,645. We would not be able to explain what the Social Security Administration (SSA) indicated you should make for each quarter. The line numbers will tell you what you earned for the entire year in 2024 (and 2023).

If you believe you will not owe in 2025 you do not need to follow the information next. If you want to be safe you can uses it to see what you should pay to be sure you have no underpayment penalty.

The information below will explain when an underpayment penalty would kick in for you in 2025. The simplest way to cover your tax liability, and there could be some balance due when you file, is to pay at least as much as your tax is for 2024 (line 24, Form 1040). As long as you pay this amount in estimated payments (divide by 4) equally throughout the tax year and withholding from an employer, you would have no penalty. Take the information into account below.

Generally, you can avoid the penalty if your total timely estimated payments and withholdings are greater than or equal to the lesser of:

90% of the total tax after credits for the current year, or
100% of the total tax after credits in the prior year
See one exception below.

You can also avoid the penalty if the amount you owe is less than $1,000 as long as any estimated tax payments you made are timely.

Note: High-income taxpayers. If your adjusted gross income (line 11 of your 2023 Form 1040) is greater than $150,000 (or $75,000 if you're married and file a separate return from your spouse), you can avoid a penalty by paying at least 110% of your total tax from the prior year.

@Casey007

[Edited: 04/08/2025 | 8:30 AM PST]

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