What is the best way to file if self employed to receive Social Security credits for a senior?

[paytheman]

Hello,

2 part question: What would be the best route for a person at retiring age, who can no longer work, receive Social Security credits? I am thinking of helping her start her own business (self employment) so she can report the earnings to receive SS credits. If we go this route how should it be reported when filing taxes?

Also, would you recommend her opening a “business” in where she does laundry or cooks food for relatives or family and they pay her for it? We would actually pay her through cash or card (Square Pay) and run it like a small business self employment gig. Im asking because I don't want the IRS to suspect something malicious and get audited.

If there are other suggestions that would be great! She has many issues from overworking in the past but not enough to qualify for SSI. She only needs like 8 credits more.

Thanks for your help in advance!

[Bsch4477]

As an independent contractor she would complete Sch C and pay self employment tax on her net income to receive social security credit. 

[xmasbaby0]

How to earn credits for Social Security:

https://www.ssa.gov/pubs/EN-05-10072.pdf

If you have self-employment income for which you will pay self-employment tax for Social Security and Medicare,  you will need to use online Premium software or any version of the CD/download so that you can prepare a Schedule C for your business expenses.

https://ttlc.intuit.com/questions/2926899-how-does-my-side-job-affect-my-taxes

https://ttlc.intuit.com/turbotax-support/en-us/help-article/form-1099-nec/1099-nec/L5qTsBiSe_US_en_U...

https://ttlc.intuit.com/community/self-employed/help/how-do-i-report-income-from-self-employment/00/...

https://ttlc.intuit.com/community/self-employed/help/what-is-the-self-employment-tax/00/25922

https://ttlc.intuit.com/questions/2902389-why-am-i-paying-self-employment-tax

https://ttlc.intuit.com/questions/1901340-where-do-i-enter-schedule-c

https://ttlc.intuit.com/questions/3398950-what-self-employed-expenses-can-i-deduct

https://blog.turbotax.intuit.com/self-employed/self-employed-tax-deductions-

calculator-2021-2022-50907/

https://ttlc.intuit.com/questions/1901110-do-i-need-to-make-estimated-tax-payments-to-the-irs

https://turbotax.intuit.com/tax-tools/calculators/self-employed/

[Opus 17]

Either be self-employed and file schedule C with schedule SE, or get hired as an employee.  You aren't going to be able to stop being audited if it looks suspicious, so the key is to be honest.  She really needs to be working legitimately and reporting legitimate income.  

Also note, that for purpose of earning social security credits, hiring a parent to work in your home will not work, because parents don't pay social security tax when they are hired for household employee work by their children.  (Just a thought, you don't say but that is one situation that would fit the facts you describe.)

Also note, if she did not earn SS credits because she was a stay-at-home spouse or mother for a spouse who worked, she should be able to use her spouse's credits (or ex-spouse if they are divorced) to qualify for benefits. 

[tagteam]

---

@paytheman wrote:

She only needs like 8 credits more.

---

That should not be overly difficult to achieve either via SE income or even a part-time job.

See https://www.ssa.gov/pubs/EN-05-10072.pdf