If you’re subject to SE tax and income tax, you’re generally required to file an annual return and pay estimated tax quarterly. It is important to look at your business profit and loss during the year to find out if you need to make estimated payments. If it looks like you’ll be paying SE tax, you’ll likely need to make the payments. You could be subject to a penalty if you don’t have enough withholding or estimated payments on your account.
It is very important for you report all your self-employment income properly and pay the SE tax. The SSA uses this information to calculate your benefits. If the information is not correct, it could reduce your benefits. Information on how credits are determined by SSA can be obtained at the SSA website: www.ssa.gov
SSA will only give you credit for self-employment income reported on a tax return within three years, three months and 15 days after the taxable year you earned the income. If you report a change after the time limit, SSA may change its records, but only to remove or reduce the amount.