# How is Monthly Income Calculated for Self-Employment

1. Member
Join Date
Jul 2010
Posts
36

## How is Monthly Income Calculated for Self-Employment

I've been receiving SSDI for about 7 years. I have discovered a form of work that I seem to be able to do, provided my health improves succificiently over the next several years, which is math tutoring.

So basically this is self-employment.

I have certain expenses each month, such as paying to keep a website maintained and running, paying some transportation costs to get to student's homes, paying some marketing costs (running ads, paying someone to distribute flyers, etc.). I also am working on producing math videos which will eventually be a producl, and I have computer software and hardware expenses related to that.

I also get paid by each of my tutoring clients by cash or check several times per month.

What I would like to do is keep this up part-time for now, (maybe about 10 hours per week) and then see if my health allows me to transition to more full-time work. So I am going to be aware of when my income exceeds the \$850 trial work period, from time to time. My hope is that by the time I have 9 such months, I'll be a good position to transition of disability.

Let's call my business expenses E. Let's call my received income from clients C. I also have necessary medical expenses to do my job, including medications and doctor appointments without which I would not be able to work. Let's call that M.

So what counts as my income, when computing the amount over \$850? Is it C? C-E? C-E-M?

Obviously it really should be C-E-M because even though my clients pay me C, I'm not really "making" that much money, given that I have to pay out E and M to be able to do this work at all.

But this is important because C has gone over \$850 several times. I'm working about 10 hours per week and charging \$40/hour, so C can be upwards of \$1600. But E and M together are something like \$1000, so it's not like I'm actually making \$1600.

I called SSA but they were not able to help me. They actually said they're not allowed to give out information like this because the local office handles it.

M

2. Senior Member
Join Date
Mar 2013
Posts
16,875

## Re: How is Montly Income Calculated for Self-Employment

According to the Social Security publication, Working While Disabled, If you’re self-employed, you have a trial work month when you earn more than \$850 (after business expenses).

See:

https://www.ssa.gov/pubs/EN-05-10095.pdf

I seriously doubt that your "medical expenses" will be allowed as business expenses.

As for the rest of it you can download Schedule C from the IRS website and use that to figure out your gross and net income each month.

If you are already generating income, you should have reported to SSA when it started. Being on record will get you all the help you need with record keeping and benefit adjustment when you visit the SSA office.

3. Member
Join Date
Jul 2010
Posts
36

## Re: How is Montly Income Calculated for Self-Employment

I agree that medical expenses are not business expenses for the purposes of the IRS. However, some SSA publications say they can be deducted from your TWP (trial work period) earnings, but are not entirely clear about this.

I already reported the income on a form to my local SSA office. However, I wasn't sure how to fill out the form or whether to continue sending updated copies as I work more months. The local office has not contacted me beyond sending the initial form six months ago.

It appears that on the phone, the SSA people won't help me with this. I will have to visit the local office. I was trying to avoid that, but it appears unavoidable.

Next step: schedule appointment with local office.

4. Senior Member
Join Date
Mar 2013
Posts
16,875

## Re: How is Montly Income Calculated for Self-Employment

Quoting mike1127
I will have to visit the local office. I was trying to avoid that, but it appears unavoidable.
That's right, it's unavoidable and it's foolish to try to avoid it.

My last visit to the SSA office was a few months ago. I sat for 45 minutes reading a book. Then the interview and paperwork took about 20 minutes. The clerk was knowledgeable and helpful and I was out the door. Within 30 days my adjustment kicked in.

Try doing anything on the phone and you'll just make yourself crazy and possibly lose benefits if you wait too long or don't get it right.

Next step: schedule appointment with local office.
I don't think you need an appointment. I didn't. I just walked in one morning and got everything taken care of.

5. Senior Member
Join Date
Jun 2014
Posts
3,030

## Re: How is Montly Income Calculated for Self-Employment

If you live in an area with a busy SSA field office. It is best to have an appointment. Unless you want to sit there most of the day.

Did you call the 800# or your local field office ? The 800# has limited access to information. They do not have the same level of training and experience. local field office employees have.

Would you have the same medical expenses if you were not working ? If I remember correctly, regular medical expenses do not count. If you had medical expenses directly tied to working. They would count.

6. Senior Member
Join Date
Jan 2009
Location
California
Posts
1,034

## Re: How is Montly Income Calculated for Self-Employment

Call your medical expenses I. Or like SSA does, IRWE. Impairment Related Work Expenses. Those are the out of pocket bills that you have because you go to work and people who are not disabled don't have to pay. The expenses that are directly related to BOTH your medical condition and your ability to keep working. A visually impaired or non-ambulating person needs to pay more for transportation to get to work. You may have to pay for modifications to your work space. You may have to take a few more medications or purchase more medical devices. You may have to pay an assistant out of pocket or outsource more tasks than someone who is not disabled.

Here is a link to the chapter. You should notice that it is in the SGA section. So this should answer your questions. I'd be curious to find out what you think would qualify as an IRWE and why.

https://secure.ssa.gov/apps10/poms.nsf/lnx/0410520000

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