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  • Earning Social Security credits & Tax Filing question

    From quilt192@gmail.com@21:1/5 to All on Sat Sep 5 06:34:36 2015
    I am now 45 years old, and I wanted to find out if during the last number of years I may have been missing out on getting more Social Security credits because of the way I am filing my taxes. I live in New York State, I am married, self-employed (all my
    jobs are either cash or via 1099), and in addition, I trade stocks for myself. My wife has a regular W-2 income and we file jointly.

    So my initial question is this: If I show a $2K loss for my business (Schedule C) while a gain for my stock transactions (let's say +$40K for the year), do I still get any Social Security credit(s) on my $38K earned? Or is it then better to show some
    kind of a gain for my business/Schedule C, so I can receive more credits? I can always show less business deductions in order to get my Schedule C into a positive number.

    I have read on the official Social Security website http://www.ssa.gov/planners/credits.html#&a0=0

    that:

    "The amount of earnings it takes to earn a credit has changed since 1978. In the year 2015, you must earn $1,220 in covered earnings to get one Social Security or Medicare work credit and $4,880 to get the maximum four credits for the year"

    So my final question is: Does it matter if I "earn" money via stocks trades or my self-employed business?

    Thanks everyone for the help!

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  • From Retired@21:1/5 to quilt192@gmail.com on Sat Sep 5 13:02:55 2015
    On 9/5/15 9:34 AM, quilt192@gmail.com wrote:
    I am now 45 years old, and I wanted to find out if during the last
    number of years I may have been missing out on getting more Social
    Security credits because of the way I am filing my taxes. I live
    in New York State, I am married, self-employed (all my jobs are
    either cash or via 1099), and in addition, I trade stocks for
    myself. My wife has a regular W-2 income and we file jointly.

    So my initial question is this: If I show a $2K loss for my
    business (Schedule C) while a gain for my stock transactions (let's
    say +$40K for the year), do I still get any Social Security
    credit(s) on my $38K earned? Or is it then better to show some
    kind of a gain for my business/Schedule C, so I can receive more
    credits? I can always show less business deductions in order to
    get my Schedule C into a positive number.

    I have read on the official Social Security website http://www.ssa.gov/planners/credits.html#&a0=0

    that:

    "The amount of earnings it takes to earn a credit has changed since
    1978. In the year 2015, you must earn $1,220 in covered earnings to
    get one Social Security or Medicare work credit and $4,880 to get
    the maximum four credits for the year"

    So my final question is: Does it matter if I "earn" money via
    stocks trades or my self-employed business?

    Thanks everyone for the help!


    Yes, it matters. You only get SS credit on W-2 wages and/or Sch SE
    income. "Unearned" income such as capital gains, pensions, IRA
    withdrawals do not count.

    You should read and study SS info at http://socialsecurity.gov/pubs/EN-05-10022.pdf which has more detail
    on how credits are figured.

    If you haven't already, you should signup for a mySocialSecurity
    account at http://www.ssa.gov/myaccount/ so you can look at your
    annual "Earnings Statement" to see if your account is being credited
    properly, and if you have "enough" quarters of credit.

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