Did you know
that self-employed individuals can earn social security credits? In fact, they
can earn up to four within a given tax year. And, if they earn at least 40 by
the time they retire, they can even be eligible for Social Security retirement
benefits.
These
credits are based on your wages and earnings. You can get a credit for every
$1,410 you earn, though, as mentioned, you can’t go over four credits a year,
no matter how much you earn.
Remember, too,
that, as a self-employed person, you’re in charge of filing your own taxes and
reporting the credits you’ve earned.
A Time Limit
You Need to Know
Those wonderful
credits you earn don’t just sit around indefinitely waiting for you to claim
them! Instead, like most things related to the IRS, there’s a time limit on how
long you have to report the income and get the credits.
That limit is
three years, three months, two weeks, and one day after December 31st
on the year you earned the income. That’s pretty specific, right? It’s so
specific because, if you miss it, you miss it. The IRS won’t make exceptions,
so make sure you don’t miss the deadline. Often, filing sooner rather than
later is the smartest option for reducing your likelihood of forgetting to
file.
Check
Your Reported Earnings
As a final
pro tip, be sure to set up an account on the Social Security Administration’s
website. There, you’ll be able to view a full record of your earnings, and you
can calculate how many credits you earned.
Also, check
carefully to ensure your wages and earnings are correct. If they’re not and
it’s costing you credits, be sure to report this issue and get your credits
before the deadline runs out. Even in the case of an error, it still applies!
Ultimately,
social security credits are a wonderful thing for the self-employed. But, it’s
up to you to ensure you get what you’re due!