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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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Taxes. I went back to work last year as a real estate agent

Customer Question

Taxes. I went back to work last year as a real estate agent in order to earn points for my retirement. As I understand, it falls in “Self employed” category. My gross income for 2014 was $5000, and my net income was $1170. As a result, I did not earn any points. Is it right strategy, to avoid same mistake this year, to not deduct any business expenses? But I still have many personal dedications, as property taxes and stack market carry over. Does it also go against my business earning or it falls in different category and will not affect it? My second question is, is there any way I can revise my 2014 tax return, by taking back business expenses deduction in order to earn those points? Thank you.
Submitted: 8 months ago.
Category: Tax
Expert:  Lev replied 8 months ago.

In 2016, you receive one credit for each $1,260 of earnings, up to the maximum of four credits per year.

Following publication might be helpful

https://www.ssa.gov/pubs/EN-05-10072.pdf

Your personal deductions would NOT affect your social security credits - but business deductions will affect.

For purposes of earning social security credits - ONLY net business income that is used to calculate self-employment taxes is counted.

On your tax return - that amount will be on schedule SE line 4

https://www.irs.gov/pub/irs-pdf/f1040sse.pdf

To earn the maximum of four credits per 2016 - your income on that line should be $1,260 * 4 = $5,040.

Questions?

Expert:  Lev replied 8 months ago.

You may not just choose not to report qualifying deductions...

If you reported deductions incorrectly - then - yes - you may amend your 2014 tax return and make corrections.

But if you correctly reported all business expenses - there is nothing you may do.

I suggest to review your 2014 tax return and verify if all deductions were reported correctly.

Here is a table that show

Amount of earnings needed to earn one quarter of coverage

https://www.ssa.gov/oact/cola/QC.html

For 2014 - you would need $1,200 to earn ONE SSA credit.