Self-employment income reporting with Social Security at 62 - staying under earnings limit?

Yes, SSA looks at your net earnings from self-employment, not your gross receipts. You'll need to complete Schedule SE with your tax return, and that's what SSA will use to determine if you exceeded the earnings limit. For 2025, if you're under FRA the whole year, you'll lose $1 in benefits for every $2 you earn above the limit. This earnings test is based on annual earnings, not monthly, even though benefits are paid monthly. If you anticipate getting close to the limit, you can voluntarily ask SSA to withhold some benefits in advance to avoid an overpayment. You can do this by filing a report of estimated earnings.

I went thru this last yr. They go by whats on ur tax return at the end of the yr. Its the net profit that counts (after expenses). If u tell them at the START of yr that u expect to make $X and it ends up being more, they'll make u pay back some benefits. If u end up making less they owe u. Its a pain!!

Self-employment income is a bit complex with Social Security's earnings limit, but here's how it works: 1. SSA counts NET earnings (after legitimate business expenses) toward the earnings limit 2. You report estimated earnings when you initially apply for benefits 3. You should proactively contact SSA if your income projection changes significantly 4. The final reconciliation happens after you file your tax return 5. For self-employment, they also look at "substantial services" - if you work over 45 hours/month in your business, they may consider that exceeding the limit regardless of earnings Keep detailed records of both income and expenses. Consider setting up a separate business bank account if you don't already have one. And remember to track hours worked each month - this is especially important for professionals like therapists where your time directly relates to your services.

When I retired at 63, I got SO frustrated trying to reach SSA to ask these exact questions. Kept getting disconnected after waiting 2+ hours. Finally used a service called Claimyr (claimyr.com) that got me connected to a real person in about 15 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent I spoke with explained that for self-employment, you report your expected net earnings when you apply. Then update them if things change significantly. They'll adjust your benefits throughout the year based on estimates, and then do a final accounting after your tax return is filed. My CPA helped me set up quarterly estimated net profit calculations to stay on track. Definitely worth paying a professional to help with this!

My sister is a therapist and she just retired last year and started SS. She said it was a nightmare figuring out the income stuff. She ended up just limiting her clients to stay WELL UNDER the limit because she was so worried about going over. Better safe than sorry I guess.

I'm so confused about all this!! I was planning to retire from nursing next year at 62 and start a little health coaching business on the side. Now I'm terrified I'll mess up my SS checks. When you file taxes as self-employed, does that automatically connect to Social Security somehow? Or do you have to separately report to them? What forms do you use? Will they tell me if I'm getting close to the limit or just suddenly start taking money back??

OP I'm a retired accountant and here's what I tell my clients in your situation: the worst case scenario is that you earn too much and have to pay back some benefits. But that's not a disaster! You're not going to jail or losing future benefits. It's just a financial adjustment. My suggestion: create a spreadsheet to track your monthly income and expenses. Make conservative estimates (higher for income, lower for expenses) and set your practice limits to stay about 15% BELOW the annual limit. This gives you a safety buffer. Also important - SSA counts EARNED income toward the limit. If you have investments, rental property, etc. generating passive income, that doesn't count toward the earnings limit.

DONT FORGET the limit goes way up in the year u reach full retirement age and then disappears completely! My friend worked part time staying under the limit for 3 yrs then when he hit full retirement age he went back to working normal hours with no penalty.

One practical tip from my experience - I found it helpful to do a mid-year calculation after my Q2 estimated tax payment. This gives you a chance to adjust your work schedule for the second half of the year if you're trending too high or too low relative to the earnings limit. Also, remember that SSA counts income when it's earned, not when it's paid. So if you do therapy work in December but don't get the insurance payment until January, that still counts for the December year's earnings. This gets especially tricky with self-employment.

Thank you all for the incredibly helpful advice! I feel much more prepared now. I'll plan to: 1. Talk to my CPA about quarterly tracking 2. Create a spreadsheet with a 15% buffer below the limit 3. Track both service dates and payment dates 4. Report estimated earnings when I initially apply 5. Use Claimyr if I need to actually speak with someone at SSA One last question - does anyone know if there's a specific form or process for updating SSA if my earnings projection changes during the year?

As someone who just went through this transition myself, I want to add one important point that hasn't been mentioned yet - keep ALL your documentation organized from day one. I created a simple filing system with folders for: - Monthly income/expense tracking sheets - All correspondence with SSA (including phone call notes with dates/rep names) - Quarterly estimated tax payments and calculations - Any forms submitted (SSA-795, etc.) This saved me so much stress during my year-end reconciliation. Also, I found it helpful to send SSA my earnings updates via certified mail rather than just calling - creates a paper trail that both you and they can reference later. The peace of mind from having everything documented is worth the extra effort, especially when you're already dealing with the stress of transitioning to retirement while managing ongoing client responsibilities.

As a fellow healthcare professional who went through this exact situation two years ago, I can share some practical insights that might help ease your concerns. The key thing to understand is that SSA uses your net self-employment earnings (from Schedule SE) to determine if you've exceeded the limit. This means all your legitimate business expenses - malpractice insurance, EHR costs, office rent, continuing education, professional licensing fees, etc. - get deducted before they calculate whether you're over the limit. Here's what worked for me: I created monthly "profit snapshots" where I'd calculate my net earnings to date and project where I'd likely end up for the year. This helped me make decisions about taking on new clients or adjusting my schedule. I also kept a cushion of about $3,000 below the annual limit to account for unexpected income or expense variations. One thing that surprised me was how reasonable SSA was when I had questions. Yes, it's hard to reach them by phone, but when I did get through, the representatives were knowledgeable about self-employment situations. They understand that professional practices have irregular income patterns. The "substantial services" rule mentioned earlier typically applies more to business owners who could delegate work to others. As a practicing psychologist seeing your own clients, your situation is more straightforward - it's primarily about the earnings test, not the hours test. My biggest recommendation: don't let fear of the earnings limit prevent you from maintaining some practice if that's what you want to do. The worst-case scenario is manageable, and the flexibility of part-time practice during early retirement can be really valuable both financially and professionally.

I'm going through a similar situation right now - just turned 62 and trying to figure out how to handle part-time consulting work while collecting Social Security. Reading through all these responses has been incredibly helpful! One thing I wanted to add that I learned from my financial advisor: you might want to consider whether it makes sense to delay Social Security for a few more years if your health issues aren't immediately forcing retirement. The difference between claiming at 62 vs full retirement age is pretty significant - around 25-30% less in monthly benefits for the rest of your life. That said, I completely understand the need for immediate income given your medical issues and home repairs. Sometimes you have to work with the situation you're in rather than the ideal scenario. For tracking purposes, I've found it helpful to set up a separate business checking account just for my consulting income and expenses. Makes it much easier to calculate net earnings throughout the year and provides clear documentation if SSA ever has questions. Also, have you looked into whether your state has any resources for healthcare professionals transitioning to retirement? Some states have programs specifically for mental health providers that might offer guidance on managing the transition while maintaining limited practice. Good luck with everything - it sounds like you have a solid plan forming!

I'm a recently retired financial planner who specialized in Social Security optimization, and I want to address a few key points that might help clarify some of the confusion in this thread. First, regarding the earnings limit calculation for self-employment: SSA uses your net earnings from self-employment as reported on Schedule SE (not Schedule C alone). This is typically your gross receipts minus ordinary and necessary business expenses. The key is that these must be legitimate business expenses that you would incur regardless of your Social Security status. One important detail that hasn't been fully addressed: if you're receiving Social Security and working part-time, SSA will initially estimate your benefits reduction based on your projected annual earnings. However, they also apply a monthly earnings test during the first year of retirement. For 2025, if you earn more than $1,860 in any month before reaching FRA, you won't receive benefits for that month, regardless of your annual total. This monthly test only applies to your first year of collecting benefits, but it's crucial for part-time practitioners to understand. If you have a particularly busy month where insurance payments come in all at once, you could temporarily lose that month's Social Security payment even if your annual earnings stay under the limit. My recommendation: work with your CPA to set up a system that tracks both monthly and annual earnings projections. Consider spacing out your client sessions and billing to avoid any single month where your net earnings exceed the monthly limit during your first year of benefits. Also, keep in mind that once you reach full retirement age, both the annual and monthly earnings limits disappear completely, and you can earn as much as you want without affecting your Social Security benefits.

This thread has been incredibly helpful for understanding the complexities of managing Social Security with self-employment income! As someone approaching this same situation in a few years, I wanted to add one resource that might be useful. The Social Security Administration actually has a specific publication (SSA Publication No. 05-10069) called "How Work Affects Your Benefits" that covers both the annual and monthly earnings tests in detail. It includes examples for self-employed individuals and explains the timing issues around when income is counted. Also, for anyone dealing with irregular billing cycles like insurance payments, I've heard from colleagues that some practitioners find it helpful to work with their billing company or EHR system to set up more predictable payment schedules when possible. Some insurance companies will allow you to request specific payment dates or batch smaller claims together to avoid large lump sums hitting in a single month. One more thing - if you're working with a CPA who isn't familiar with Social Security earnings tests, it might be worth finding one who has experience with retirement transitions for healthcare professionals. The rules are complex enough that having someone who understands both the tax and Social Security implications can save you a lot of stress. Best of luck to everyone navigating this transition! The planning seems complicated, but it's clear from all the responses that it's definitely manageable with the right preparation.

This has been such an enlightening discussion! As someone who will be facing a similar situation in a couple of years (I'm a licensed clinical social worker currently at 60), I wanted to thank everyone for sharing their real-world experiences and practical advice. One additional resource that might be helpful - the National Association of Social Workers (NASW) and American Psychological Association (APA) both have practice management resources that address retirement transitions. While they don't specifically cover Social Security coordination, they do have guidance on maintaining professional liability coverage, continuing education requirements, and ethical considerations for part-time practice that could factor into your business expense calculations. @Margot Quinn, your original question really resonated with me because I'm already starting to think about how to structure a gradual transition rather than an abrupt retirement. The medical and financial pressures you mentioned are so real for many of us in healthcare. For anyone following this thread, I'd also suggest checking with your state licensing board about any specific requirements for part-time practice or reduced caseloads. Some states have different continuing education requirements or supervision rules that could affect your business expenses and time commitments. The collective wisdom shared here about tracking systems, buffer amounts, and documentation strategies is invaluable. It's clear that success with this transition requires much more planning than just "I'll work a little less and collect Social Security." Thank you all for sharing your knowledge so generously!