Tax Law (Questions About Taxes)/Social Security

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Question
Hi John,

i worked as a babysitter in 2012 and received $7000 as income. when i filed my taxes i am getting back  $713 as a refund when i filed married jointly with my husband who is unemploy. however, i am trying to understand how my social security is getting affected. the reason i am working is to accumulate credit for  my social security retirement.  i received $7000 and no tax was withheld. i am trying to file but i am getting $713 back. if i am getting money back, how am i contributing to my social security?  can you explain?  i was thinking that social security was going to be withheld once i file.

Answer
Marta,

Thanks for your question.

The social security is not determined automatically, you have to calculate,report and pay it.

You report your babysitting earnings on Schedule C, showing your income and business-related deductions.  The net profit shown there is carried forward to Schedule SE, which is where you calculate your self-employment tax (social security and medicare).  That amount carries forward to the 1040 where it is added to your taxes.  Did you do all this?

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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