Q. my question is for self employed, what is earned because I was told it is not just net income, there is a different calculation in this situation.
A. That was answered above by dmertz. The "different calculation" is to multiply net self employment income by 0.9235.
Q. so this number that is reported to social security, is not to exceed the $23,400 for the year if one is 62 and receiving benefits, correct?
A. Yes.
Q. Why is 0.9235 used in the calculation?
A. That's a "deduction" for half the FICA tax, since you, as a self employed person, have to pay both the "employer" portion and the employee" portion of FICA (social security and medicare) tax.
