How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Megan C Your Own Question
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Type Your Tax Question Here...
Megan C is online now
A new question is answered every 9 seconds

I have been living in US with green card for 3 years. I plan

This answer was rated:

I have been living in US with green card for 3 years. I plan to become a citizen in 2 years time. I am self-employed, earning gross income of $12,000 per year.



Question1: Must I pay a social security tax to the IRS?  I am 58 years old now.


Question 2:a) Must I pay a self-employment tax?

                    b) How is this s-e tax different to soc sec tax?


Question 3: What is the minimum gross income I must earn, to NOT have to file a 1040 ?

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Question 1: Yes, you must pay social security tax. However, this is called "self employment tax" for those who are self employed. These taxes are the medicare and social security taxes for those who work for themselves.

Question 2: a) Yes you must pay self employment tax and b) It is the same thing as social security tax

Question 3: If you work for yourself, you have to file a tax return if you have more than $400 gross proceeds.

Please let me know if you need anything additional. Thanks again for using and have a great night.

** Please take a moment to rate my response as "Excellent" so that I may receive credit for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site. This answer is not financial or legal advice, and must not be used as such. For financial and legal advice, please contact a local professional.*

You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

Megan C and other Tax Specialists are ready to help you
Thanks for allowing me the opportunity to help you. Please let me know if I can be of any further assistance to you in this matter. I really enjoyed working with you – please feel free to request me again when you come back to ask another question. Simply enter "MyVirtualCPA" in the subject of your question Thanks again for being a JustAnswer customer
Customer: replied 4 years ago.

Thanks, XXXXX XXXXX am more confused now.

1)Thanks for explaining the difference between se and soc sec tax.

However, I need to know if

a) Is it MANDATORY or OPTIONAL, to pay in se tax?


b) Due to my question below, I am unclear as to how much I must gross, before having to pay se tax, if in fact it is mandatory.



2) The IRS website states that you do not have to file taxes, if you gross $9,750 or less, as self-employed, single person of my age.

Yet you say the figure is $400.


3) A new question for you is: At what point can I stop paying tax in TWO different countries?

(I currently pay tax in my home country, South Africa, AND here in USA.)

A) mandatory
B) You pay SE tax if you earn even $1.
2) The $9,750 figure is for those who work a W-2 job, or have income that is not subject to self employment tax. You have to file your return to pay self employment taxes if you gross $400 or more from self employment.

3) You would have to give up your US residency to end your US tax obligations.

Customer: replied 4 years ago. says that you are correct, re $400 min net. The @9,750 seems to relate to the GROSS income. Is that correct?


So let me get this straight:

If I only net $400 for the entire year, I have to pay 13.3% to se tax. That leaves me with $346.

What federal and state taxes must I then pay on the remaining $346 ?

The $400 is GROSS receipts. The $9,750 is for income that is not subject to self employment taxes.

Yes, you would have to pay the self employment tax on the $400 and then federal and state on the same $400. You only deduct 1/2 of your self employment taxes when calculating your income tax.

Customer: replied 4 years ago.

Sorry, I still don't understand. Turbotax says $400 NET,

but you say $400 GROSS.


Second, what kind of income is "not subject to se taxes" ?


Many thanks, XXXXX XXXXX getting there...

Income not subject to self employment taxes would be wages, interest, dividends, capital gains and losses -everything that is not income from self employment.

Yes, earnings are net. I did not mean gross.

Customer: replied 4 years ago.


Regarding my previous query:


"I currently pay tax in my home country, South Africa, AND here in USA". Idid not make my issue clear, perhaps:


My issue is: Once I become a US citizen, is it only at THAT point, that I will cease to have to pay

-South African tax to SA

-AND... US tax to US


and instead, simply pay all worldwide tax to US.

I do not know, because I know nothing about the tax structure in South Africa. All I know is that if you are a resident or citizen of the United States you are taxed on your worldwide income.
Customer: replied 4 years ago.

You did not answer my query re -


Once I become a US citizen:


Will I ONLY need to pay the IRS tax on SOUTH AFRICAN income




Will I need to pay South African taxes, TO SOUTH AFRICA, on SA interest income?


I know that you do have to pay tax on South African income in the United States.

I do not know about South African income tax, therefore I cannot answer that portion of your question.

You could have to pay taxes to both South Africa AND the US.
Customer: replied 4 years ago.

That last question does NOT require you to know SA tax law, only US tax law !

So I still do not have an answer.



Also, in one of my previous questions, you wrote 'gross' instead of 'net'. I had to correct you...


In addition, you did not clarify the issue re the $9,750 minimum income.


Thus,I paid $20 to get no answers, except for one correctly answered query re se tax...


Please answer all the above, or I will be asking for a refund.