wrote
It is sometimes to the advantage of the taxpayer to report
> this type
> of income as self-employment income. The self-employment
> tax is
> generally offset by the earned income tax credit and if
> the amount of
> self-employment income exceeds the minimum set by SSA for
> the year,
> the taxpayer gets credit for four quaters of employment
> with the
> Social Security Administration.
Thank you for this analysis. A few questions:
Fromformatting linkin 2007 I understand the minimum business income required for a quarter of future SS coverage is $1000. Will the SSA credit one quarter at a time? Your wording that only talks about four quarters above is a little confusing to me.
I talked with the local plasma center where I live. A client can donate twice a week for a maximum gross income of $60 per week. So from this source, a taxpayer might have as much as $3120/year for income where I live.
Income is reportable regardless of documentation, and in
> this case,
> the income would be reported on Schedule C of form 1040.
To be very clear, Schedule C-EZ is also acceptable (assuming the taxpayer meets the C-EZ requirements), correct?
Thank you also Harlan and Han for your input. Han, I would be interested in knowing how your company pays clients for their time and expenses. Check? Cash? Is there any documentation (at your business and/or sent to the client) for tax purposes?
The plasma center where I live pays cash and says they only document how often an individual has blood withdrawn, so they can ensure they are not risking their health.