Social Security earnings limit confusion with eBay self-employment income - how to report monthly?

Yep, had the same issue with my Amazon selling business. SSA looks at the NET earnings from self-employment (after expenses) divided by the months you worked. So if u worked all year, they divide by 12 even if some months were way more profitable than others. Keep REALLY good records of your hours worked each month - I learned this the hard way when they asked me to prove I wasn't working too many hours in certain months!

Self-employment income and Social Security's earnings test is often misunderstood. Here's how it works: 1. For retirement benefits before Full Retirement Age (FRA), SSA applies the earnings test to your net earnings from self-employment (profit after business expenses). 2. For the annual earnings test, they divide your yearly self-employment income by the number of months you performed "substantial services" in your business. This doesn't necessarily mean every month you had sales. 3. The monthly earnings test only applies for the first year you claim benefits. After that first year, only the annual test matters. 4. For determining "substantial services" in self-employment, SSA considers: - Hours worked (over 45 hours/month is always substantial; 15-45 depends on skill required) - Nature of services provided - How comparable your work is to what you did before retirement SSA Publication No. 05-10069 explains this in detail. You should keep a monthly log of hours worked and business activities to document your involvement.

I just wanna say SS is a NIGHTMARE with self-employment!!! I had my benefits reduced last year bcuz they said I worked too much in my Etsy shop even tho I made less than the limit overall. Make sure u document EVERYTHING and good luck dealing with them!!

You're right to be concerned about this. The SSA doesn't automatically know your monthly earnings - they typically find out when your tax return is processed. If you exceed the annual limit, they'll calculate an overpayment. For the monthly test (which only applies in your first year on benefits), you need to be proactive. Here's what I recommend: 1. Track your monthly net earnings (income minus expenses) and hours worked 2. Contact your local SSA office if you have a month that exceeds the monthly limit ($1,860 for 2025) 3. Consider using the SSA's voluntary reporting form (SSA-131) for months you exceed the limit Most importantly, remember that only the months you perform "substantial services" count. So if you spend minimal time (under 15 hours) on your business in some months, those months might not even count against you regardless of sales.

I went through this exact situation when I started my SS at 63 while running my online collectibles business. Trying to call Social Security to get clear answers was impossible - I spent DAYS on hold only to get disconnected or told different things by different reps. I finally used a service called Claimyr (claimyr.com) that got me connected to a real SSA agent in about 20 minutes instead of waiting for hours. The agent walked me through exactly how to document my self-employment activity and explained the substantial services rules. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU After that call, I learned I needed to keep a simple log of hours worked per month and note my business activities. SSA actually cares more about your work activity than the fluctuating income in self-employment cases.

One more thing i forgot to mention - when I talked to SSA they said that my eBay business counts as an "ongoing business" so i'm considerd to be providing services every month even if i don't make a sale that month. Its not like a job where u can just say "I didn't work these months" if ur still maintaining the business presence. just something to think about

Update: I called my local SS office (finally got through after trying different times of day) and got some clarification. The rep said I should: 1. Keep a simple monthly log of hours spent on eBay business activities 2. Track both my gross sales and estimated expenses by month 3. Use the SSA-131 form to report any months where I either work more than 45 hours OR make net profit above the monthly limit ($1,860) She said after my first year on benefits, they'll only look at my annual total from Schedule C, but for this first year, they look at it month by month. Thanks everyone for your help!

Im in the same boat with my Poshmark business and what I do is guesstimate my hours each week and write them down in a planner. For income I just download the monthly sales report and subtract fees+shipping costs+cost of items. It's not perfect but my tax guy said it should be fine if SSA ever questions me. The whole system is so confusing though!!!!