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If you receive SSI - how Social Security counts self-employment income: If you are self-employed, Social Security counts your NESE. Determining Countable Income-SSI Program (Title XVI) 1 (IRS sometimes calls the amount after deducting allowable business expenses and half your Social Security taxes as your “adjusted gross income.” This is the amount you would pay income tax on if your earnings were high enough.) See 20 C.F.R. SSA also allows you to deduct from your earnings 50% of the Social Security tax you paid. NESE is the amount of your independent contractor/self-employed checks minus any business expenses that are allowed by the Internal Revenue Service (IRS). Deductions available to determine your NESE: The income left after reducing your business expenses or other deductions is referred to by SSA as your Net Earnings from Self-Employment. This is because you may have business expenses or other deductions that reduce your income. However, if you are an independent contractor or self-employed, your income may not be the amount of any check you receive but a lower amount. When determining countable income, Social Security looks at your gross income before any deductions. Gross Income versus Net Earnings from Self-Employment (NESE): We also recommend that you three-hole punch a manila envelope and put the envelope in your notebook so that you have a secure place to keep your check stubs and receipts. We recommend that you three-hole punch your papers and put them in a notebook. Write down the person's name, what you talked about and the date you talked or met.
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