On Social Security | How to Start Your Own Business, License, Bank Account, Credit Profile, EIN, etc.

Stephanie McClain
Aug 18
3 min read

Starting a business while on Social Security can feel overwhelming—but it’s possible, empowering, and often more stable than relying on a traditional job. If you receive SSDI (Social Security Disability Insurance) or SSI (Supplemental Security Income), you can start and run a small business, but you’ll need to carefully manage your income reporting, business structure, and financial setup.

Here’s a step-by-step guide to help you get started:

1. Understand the Rules with Social Security

Before starting, learn how Social Security views self-employment:

SSDI: You are allowed to run a business, but your net earnings and work activity (called SGA – Substantial Gainful Activity) cannot exceed certain limits.
SSI: You can also run a business, but your benefits adjust based on your countable income. Some work incentives may help protect your benefits.

👉 Tip: Keep accurate records. You’ll need to report your business earnings to Social Security every month or quarter.

2. Choose Your Business Structure

Decide how your business will be legally set up:

Sole Proprietorship – simplest and easiest to start.
LLC (Limited Liability Company) – adds protection for your personal assets.
Nonprofit or Partnership – if working with others.

👉 Many people on Social Security start as sole proprietors and upgrade later.

3. Apply for an EIN (Employer Identification Number)

Even if you’re the only person in your business, an EIN from the IRS is important.

It protects your Social Security number.
Makes it easier to open a business bank account.
Helps you establish business credit.

You can apply for free at the IRS website.

4. Register and Get Your Business License

Depending on your city or state, you may need:

A business license or occupational permit.
A DBA (Doing Business As) if your business name is different from your legal name.

👉 Check with your local county clerk’s office or state business registration office.

5. Open a Business Bank Account

Keep your personal and business money separate. This is especially important while on Social Security:

Makes income reporting easier.
Helps prove which expenses are business-related.
Builds credibility for your business.

👉 Bring your EIN, business license, and ID when opening the account.

6. Build a Business Credit Profile

Having a strong business credit profile can help you access funding without relying on personal credit. Steps:

Get a DUNS number from Dun & Bradstreet.
Apply for vendor credit with companies that report to business credit bureaus.
Pay bills on time to build a positive history.

7. Track Your Income and Expenses

Since you’ll be reporting income to both Social Security and the IRS, you need clear records:

Use apps like QuickBooks, Wave, or Excel spreadsheets.
Track every expense (rent, internet, supplies, marketing, etc.).
Keep receipts and invoices.

👉 The more you deduct properly, the lower your countable income—and the easier it is to stay within Social Security limits.

8. Report to Social Security and IRS

Social Security: Report earnings monthly (SSI) or after filing taxes (SSDI).
IRS: File taxes annually. You may also need to pay quarterly estimated taxes.

👉 If you’re unsure, consider talking to a CPA who understands disability and self-employment rules.

9. Grow at Your Own Pace

The best part of being self-employed on Social Security is that you’re in control. Start small, test your business idea, and scale up as you learn what works.

✅ Key Takeaway:Starting a business while on Social Security is possible if you take it step by step: understand the rules, register properly, separate your finances, build credit, and keep clean records. With planning, you can create independence, income, and peace of mind without putting your benefits at unnecessary risk