I have recently retired and found I still need 2 Social Security quarters and without them, I will need to pay around $500 per months for Medicare. (My job of 30+ years didn't pay into SS)
If I were to restore old cars for profit, can I report that income not only on Federal returns, but can I also file a Schedule SE, pay the appropriate tax, and have those profits go towards my Social Security quarters/credits? The profits were over the $1400 minimum needed in the 3 month period to qualify as a SS 'credit'.
These profits were from 2016, so if I can indeed use it towards credits, can I just file an amended 2016 return?
If you are earning money as non-employee compensation, you are required to file Schedule C and pay SE taxes on that income. If you have been doing this since 2016, you can amend returns and pay the tax due.
The IRS allows for an optional method of paying the SE taxes. Please see this SE optional method, Page 6.
Thank you for the info. Thankfully I still had TurboTax 2016 on my computer, so I did an Amended return. It's now showing that I owe $569. It is also showing $201 on a Schedule SE form. When I send the $569 check to the IRS do they then pay the $201 into Social security/Medicare or do I send that separately?
When printed out, I got the 1040X, a Schedule C-EZ, and a Schedule SE. It says what I need to mail, but also says mail "attachments". Would that mean like W-2's and 1099s?
Thanks again for the help
If your return indicates that you owe $569, that would be your additional federal income tax and your self-employment tax. You do not need to make a separate payment. In addition to the 1040X, Schedule C-EZ, and Schedule SE, send any new w-2s or 1099's you added. Don't send your original return or your original supporting documents. Only send things that are new or that changed.