Reporting income from spare time car restoration

[wl4596]

I'm retired and will be 65 in a few months and found that I still need 2 social security credits/quarters ( my job of 30 years didn't pay into social security) As is, I will need to pay around $500 per month for Medicare, but if I get those two credits (earn about $1400 per quarter) It will save at least $400 per month, which is huge right now

I was wonding if profits I made from buying old cars, restoring them and selling for profit can/should be reported to social security administration? I guess I might have to go to a tax expert, as emails to the Social security office have gone unanswered but was hoping I might get a little advie here. I've been looking around locally for a part time job, maybe 2 days a week, but so far not much luck

Thanks,

     Bill

[GailL1]

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@wl4596 wrote:

I'm retired and will be 65 in a few months and found that I still need 2 social security credits/quarters ( my job of 30 years didn't pay into social security) As is, I will need to pay around $500 per month for Medicare, but if I get those two credits (earn about $1400 per quarter) It will save at least $400 per month, which is huge right now

I was wonding if profits I made from buying old cars, restoring them and selling for profit can/should be reported to social security administration? I guess I might have to go to a tax expert, as emails to the Social security office have gone unanswered but was hoping I might get a little advie here. I've been looking around locally for a part time job, maybe 2 days a week, but so far not much luck

Thanks,

     Bill

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I hope that you have fully researched this because It all depends on who you worked for during your career.   Some government employer may not deduct from your wages and match these funds to pay into the Social Security system during your working career but they MAY pay into Medicare.  So make sure that whomever you worked for did not deduct the 1.45% from your wages for Medicare and matched it.

But if you are correct and you have paid close to 10-years in the MEDICARE system and just need to make up some quarters to be eligible for Medicare PART A without having to pay a monthly premium for it, then there are several ways open to you.  But 1st let's make sure that you know the amount you may have to pay.

Medicare.gov - Medicare Part A Cost 

Notice it says this:

Part A premiums

If you don't qualify for premium-free Part A, you can buy Part A.

If you buy Part A, you'll pay up to $458 each month. If you paid Medicare taxes for less than 30 quarters, the standard Part A premium is $458. If you paid Medicare taxes for 30-39 quarters, the standard Part A premium is $252.

In most cases, if you choose to buy Part A, you must also:

• Have Medicare Part B (Medical Insurance)
• Pay monthly premiums for both Part A and Part B

More at the link ~

Some ways to qualify for premium-free Medicare Part A:

1.  You said:  I was wonding if profits I made from buying old cars, restoring them and selling for profit can/should be reported to social security administration?

Yes, you should be doing this if the amount is more than just a few bucks.  You would be filing your taxes as self-employed with self-employed income - I am assuming that you are a sole-proprietor.  If so, then you would complete IRS Schedule C and pay taxes based on your profits - income taxes and Self-employment taxes (SE taxes).  SE taxes are both Social Security taxes and Medicare taxes and you will have to pay both the employee and employer part.  (roughly 15.3% of your self-employment profits)

IRS.gov - About Schedule SE (Form 1040), Self-Employment Tax :

Use Schedule SE (Form 1040) to figure the tax due on net earnings from self-employment. The Social Security Administration uses the information from Schedule SE to figure your benefits under the social security program. This tax applies no matter how old you are and even if you are already getting social security or Medicare benefits.

more at the link ~

There are ways that people who did not pay all the taxes, can get premium-free Part A Medicare also:

2.  If you have or had a spouse who DID pay Social Security taxes for 10 years (40 quarters), they can qualify you for premium-free Part A.   Same Part A benefits except you would be getting this benefit as a spouse.  Each Spouse would pay their own Medicare Part B premiums.

Medicare.gov - Who Can Get Medicare     (see page 3 of this pamphlet - there might be some other specifics that apply to your situation)

Here is also a link that is also talking about your situation:

FORBES 05/15/2019 - Those Who Didn't Pay Taxes In Their Day Will Now Have To Pay For Medicare  

I assume you already know how NOT paying into the SS Old Age/Disability Insurance program during the majority of your working career is gonna affect you in those programs.

Good Luck -