If you are self-employed (non-Employee independent contractor) you have to file an income tax return if your net earnings from self-employment were $400 or more. So, you are required to file a tax return.
Do I receive any cash payment(check) if I file, and claim the $13,850 USD Standard deduction for 2023?
- You will only get a refund if you've had income taxes withheld, or if you qualify for the Earned Income Credit.
- The Earned Income Credit is calculated before you decrease your income by the standard deduction.
Or do I merely receive some money in the form of credit that goes to my Social Security in some form? If someone could please clarify.
- No, a refund or a tax credit is not tied to your Social Security. If you qualify, it would be paid directly to you.
- The amount of profit you had in your business is subject to the self-employment tax. That is the profit before you take the standard deduction.
Do my $4,388 USD count as earned toward my Social Security credits, on the path to reach the 40 credits required for social security?
- Yes, however, if you have business expenses, the $4,388 will be reduced.
- You must earn at least 40 Social Security credits in your lifetime to qualify for Social Security benefits.
- In 2023, you earn 1 Social Security and Medicare credit for every $1,640 in covered earnings each year. You must earn $6,560 to get the maximum 4 credits for the year.
Even if I claim the 13 850 USD Standard deduction for 2023?
- You will be charged the self-employment tax, and have earned the credits prior to taking the standard deduction.
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