Income from your business is called Net Earnings from Self-Employment. This is what you report to Social Security, and this is what is used to determine if you get your SSDI check. For SSDI, Social Security wants to know your monthly Net Earnings from Self-Employment. If your NESE fluctuates a lot, they may instead average NESE over the period of months you worked.
You need to know 2 things to find your Net Earnings from Self-Employment:
Let’s say your business brings in $650 in one year, and you spend $110 on supplies and marketing materials for your business. We can use these numbers to find your Net Earnings from Self-Employment. There are 2 steps to do this.
Step 1. Business revenue - business expenses = net profit
In our example: 650 - 110 = 540. The business has $540 in net profit.
Step 2. Net profit x .9235 = Net Earnings from Self Employment
In our example: 540 x .9235 = $498.69 The business owner has $498.69 in net profit.
Remember, if your net profit is under $1,160/month, your benefit won’t be impacted. If your net profit is over $1,160/month, you will enter the Trial Work Period phase. See How Work Impacts SSDI to learn more about work phases.
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To Do: Calculate your monthly Net Earnings from Self Employment. These can be your actual earnings if you have some, or your projected (best guess) earnings if you’re just getting your business started. If your income varies, average it.
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Tip: It’s ok to ask for help! A benefits planner can help you do these calculations if you are feeling confused. Email [email protected] or schedule a free session.
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Go to previous section: How Work Impacts SSDI
Go to next section: Work Incentive for Small Business Owners: Unincurred Business Expenses