Steps for
Establishing Self
Employment and
Supplemental
Security Income (SSI)
Work Incentives:
-
First, you will
need to
determine with
Social Security
Administration (SSA) if
your self
employment is a
trade or
business. Is
your business a
Sole
Proprietorship,
a Partnership, a
Limited
Liability
Company or a
Corporation?
These are
important things
to consider.
Each local
Social Security
office has a
Work Incentive
Liaison or
Technical Expert
that can help
you understand
your business.
-
Second, you need
to determine if
you need
assistance with
start-up funds.
This can be
arranged through
Vocational
Rehabilitation,
Workforce
Development,
Small Business
Administration,
or through
consulting with
the
Social Security
Administration (SSA).
-
Third, you need
to determine a
method of
finance,
bookkeeping and
accounting that
applies to your
business. Are
you using a
“cash accounting
method” which is
reporting
expenses when
they are made
and recording
income when it
is received, or
an “accrual
accounting
method” which is
recording income
when it is
earned, not when
it is paid, and
record your
expenses when
the obligation
arises, not when
you pay it.
These two
methods make a
difference in
determining your
Net Earnings
from Self
Employment (NESE)
for Social
Security and
Internal Revenue
Services
purposes.
-
Fourth, you need
to ensure you
are filing the
appropriate
forms with the
Internal Revenue
Service. This
may be
completing
quarterly
returns, and
completing a
Schedule C or
Schedule C-SE
for the business
each year. You
are responsible
for making
contributions to
FICA
and all
self-employment
tax payments, so
completing the
appropriate
forms is
essential. SSA
will use tax
returns to enter
your corrected
earnings in the
record and
adjust your SSI
payment.
