How Does Being Self-Employed Affect My Social Security Disability Benefits?

If you get Social Security disability benefits, being self-employed or starting a small business could affect your benefits. The following resources can help you find out more:

  • Social Security’s publication “If You Are Self-Employed” has information about the difference between being an employee and being self-employed. Most people who pay into Social Security work for an employer. Their employer deducts Social Security taxes from their paycheck, matches that contribution and sends taxes to the Internal Revenue Service (IRS) and reports wages to Social Security. But self-employed people must report their earnings and pay their taxes directly to IRS.
  • Whether you’re an employee or self-employed, there are several Social Security work incentives that let you keep your benefits while you try to go back to work. For people who are self-employed, the Social Security Administration only counts Net Earnings from Self Employment. This is your gross receipts minus your business expenses. This way, only a portion of your net earnings are counted in determining your income from self- employment.
  • For information about everything you might want to know about self-employment and business taxes, tax deductions, small business and self-employed forms and publications, visit IRS’ A–Z Index for Business.

 

Return to Disability.gov’s Guide to Self-Employment and Starting a Small Business.