Are you self-employed and need to file some missing tax returns?

As with other taxpayers it is important for self-employed individuals to file their tax returns on time. If you have fallen back on filing tax returns like some ESL teachers in South Korea who think they are smarter than the IRS and everyone else (many American workers overseas believe they do not have to file their taxes and they are incorrect by a wide margin), you are required to pay back taxes as soon as possible.

Tax lawyers state that the IRS has a strict statute of limitations on back taxes, refunds, and debt collection. There is also a time limit on reporting social security earnings, which is 3 years, 3 months, and 15 days from the end of the calendar year in which you earn the income.

You need to report Social Security earnings within this limit, where April 15^th is the deadline, if you want credit for future Social Security benefits. Failure to do so will result in a loss of social security credits. The time limit is imposed because the Social Security Administration needs to determine how much your Social Security earnings are for social security purposes from your tax return. If you are younger than 45 you can expect social security reform to impact you because the system is not working and the numbers do not add up but this is another topic.

How Social Security Earnings are Reported

As a self-employed individual, your wages and net earnings count towards your social security earnings. Your earnings are reported on Schedule C along with Form 1040. The net earnings on Schedule C is accounted for social security.

The social security tax is determined from Schedule SE. Sometimes it may take extra time for you as a self-employed individual to gather all the required information for your tax return, which can result in late filing. However, it is essential to file before the time limit expires in order to claim social security credits, according to tax attorneys.

What are Social Security Credits?

Social security credits are also referred to as a “quarter of coverage” and are the measure of a person's work under the social security program. Section 205(c)(1) of the Social Security Act contains the law regarding the three year period for establishing self-employment earning for the purpose of earning social security credits. social security credits are based on wages and net self-employment earnings. You can earn up to four social security credits annually.

You will require 40 credits in order to qualify for retirement benefits. Therefore, if you require additional credits for social security purposes it is essential to file within the 3-year limit. Tax lawyers confirm that failure to do so will not make you ineligible for social security credits.

As a self-employed person, you will need to have a net earning of at least $400 before you can start to earn social security credits. For filing back taxes you need to keep two time limits in mind. One will be for obtaining social security credit and the other 3-year limit for claiming refunds from the IRS.

You need to be aware that the expiry date of the social security time limit is on March 15^th three years after the end of the calendar, while the tax refund limit expires on April 15^th three years after the end of the calendar year. If you need to make any amendments to your social security earnings the same 3-year limit applies. Therefore, you need to check your social security statement periodically and inform the Social Security Administration of any earnings not reported before the statute of limitations ends.

All this may be more complicated than it sounds and is reads pretty complicated. Therefore, if you need to file missing tax returns or require help solving IRS problems, we encourage you to seek the assistance of a tax lawyer. Not even Michael Jordan won basketball games alone. Not even Ronald Reagan created all those jobs by himself. Not even Bill Clinton balanced a budget himself – Newt Gingrich forced him to the table. Not even Reagan eradicated the Soviet Union by himself. Not even General Patton knocked back the Nazis all by himself. Not even Peyton Manning won all those NFL games by himself. If all these people needed help, you can ask for help too.

Go right here to ask for help: Tax.USAttorneys. You will not be the first one. It is the smart thing to do.