Being Self Employed or in a Family Business
The majority of people who pay into Social Security work for someone else. Their employer deducts Social Security taxes from their paycheck, matches that contribution, and sends wage reports and taxes to the Internal Revenue Service and Social Security.
Self-employed people must fill out the forms and pay the Social Security taxes directly to the government. The self-employed acts as both the employer and employee.
Family members may operate a business together. A husband and a wife may be partners or a joint venture. If you operate a business together as partners, you should each report your share of the business profits as net earnings on separate self-employment returns (Schedule SE), even if you file a joint income tax return. The amount each of you should report depends upon your agreement.