Instructions for IRS Form 1040 Schedule Se - Self-employment Tax 2018

November 14, 2018 "Instructions For Irs Form 1040 Schedule Se - Self-employment Tax" contain the latest filing requirements for the IRS-issued Form 1040. Download your copy of the instructions by clicking the link below.

IRS Form 1040 is a tax form issued by the United States Internal Revenue Service.

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Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule SE (Form 1040)
Self-Employment
Use Schedule SE (Form 1040) to figure the tax due on net earnings from self-employ-
ment. The Social Security Administration uses the information from Schedule SE to
Tax
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.
Additional information. See Pub. 225 or Pub. 334.
Section references are to the Internal
Even if you had a loss or a
earnings. If you had no other income
Revenue Code unless otherwise noted.
small amount of income from
subject to SE tax, enter “Exempt—Form
TIP
self-employment, it may be to
4361” on Schedule 4 (Form 1040),
Future Developments
your benefit to file Schedule SE and use
line 57, or Form 1040NR, line 55. How-
either "optional method" in Part II of
ever, if you had other earnings of $400
For the latest information about devel-
Long Schedule SE (discussed later).
or more subject to SE tax, see line A at
opments related to Schedule SE (Form
the top of Long Schedule SE.
1040) and its instructions, such as legis-
Who Must Pay
lation enacted after they were published,
If you have ever filed Form
Self-Employment (SE) Tax
go to IRS.gov/ScheduleSE.
!
2031 to elect social security
coverage on your earnings as a
Self-Employed Persons
CAUTION
What's New
minister, you can’t revoke that election.
You must pay SE tax if you had net
Maximum income subject to social se-
If you must pay SE tax, include this
earnings of $400 or more as a self-em-
curity tax. For 2018, the maximum
ployed person. If you are in business
income on either Short or Long Sched-
amount of self-employment income sub-
(farm or nonfarm) for yourself, you are
ule SE, line 2. But don’t report it on
ject to social security tax is $128,400.
Long Schedule SE, line 5a; it isn’t con-
self-employed.
sidered church employee income. Also,
You also must pay SE tax on your
General
include on line 2:
share of certain partnership income and
Instructions
The rental value of a home or an
your guaranteed payments. See
Partner-
allowance for a home furnished to you
ship Income or
Loss, later.
(including payments for utilities), and
Who Must File Schedule SE
The value of meals and lodging
Employees of Churches and
You must file Schedule SE if:
provided to you, your spouse, and your
Church Organizations
The amount on line 4 of Short
dependents for your employer's conven-
If you had church employee income of
Schedule SE or line 4c of Long Sched-
ience.
$108.28 or more, you must pay SE tax.
ule SE is $400 or more, or
However, don’t include on line 2:
Church employee income is wages you
You had church employee income
Retirement benefits you received
received as an employee (other than as a
of $108.28 or more. (Income from serv-
from a church plan after retirement, or
minister, a member of a religious order,
ices you performed as a minister, mem-
The rental value of a home or an
or a Christian Science practitioner) of a
ber of a religious order, or Christian Sci-
allowance for a home furnished to you
church or qualified church-controlled or-
ence practitioner isn't church employee
(including payments for utilities) after
ganization that has a certificate in effect
income.) See
Employees of Churches
retirement.
electing an exemption from employer
and Church
Organizations.
If you were a duly ordained minister
social security and Medicare taxes.
Exception to filing Schedule SE. If
who was an employee of a church and
you filed Form 4029 or Form 4361 and
you must pay SE tax, the unreimbursed
Ministers, Members of Religious
received IRS approval, you may not
business expenses that you incurred as a
Orders, and Christian Science
need to file Schedule SE. See
Ministers,
church employee are not deductible as
Practitioners
Members of Religious Orders, and
an itemized deduction for income tax
Christian Science Practitioners
and
purposes. However, when figuring SE
In most cases, you must pay SE tax on
Members of Certain Religious Sects
for
tax, subtract on line 2 the allowable ex-
salaries and other income for services
information on how to report your
penses from your self-employment earn-
you performed as a minister, a member
self-employment earnings.
ings and attach an explanation.
of a religious order who hasn’t taken a
vow of poverty, or a Christian Science
If you were a U.S. citizen or resident
practitioner. But if you filed Form 4361
alien serving outside the United States
and received IRS approval, you will be
as a minister or member of a religious
exempt from paying SE tax on those net
order and you must pay SE tax, you
SE-1
Nov 14, 2018
Cat. No. 24334P
Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule SE (Form 1040)
Self-Employment
Use Schedule SE (Form 1040) to figure the tax due on net earnings from self-employ-
ment. The Social Security Administration uses the information from Schedule SE to
Tax
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.
Additional information. See Pub. 225 or Pub. 334.
Section references are to the Internal
Even if you had a loss or a
earnings. If you had no other income
Revenue Code unless otherwise noted.
small amount of income from
subject to SE tax, enter “Exempt—Form
TIP
self-employment, it may be to
4361” on Schedule 4 (Form 1040),
Future Developments
your benefit to file Schedule SE and use
line 57, or Form 1040NR, line 55. How-
either "optional method" in Part II of
ever, if you had other earnings of $400
For the latest information about devel-
Long Schedule SE (discussed later).
or more subject to SE tax, see line A at
opments related to Schedule SE (Form
the top of Long Schedule SE.
1040) and its instructions, such as legis-
Who Must Pay
lation enacted after they were published,
If you have ever filed Form
Self-Employment (SE) Tax
go to IRS.gov/ScheduleSE.
!
2031 to elect social security
coverage on your earnings as a
Self-Employed Persons
CAUTION
What's New
minister, you can’t revoke that election.
You must pay SE tax if you had net
Maximum income subject to social se-
If you must pay SE tax, include this
earnings of $400 or more as a self-em-
curity tax. For 2018, the maximum
ployed person. If you are in business
income on either Short or Long Sched-
amount of self-employment income sub-
(farm or nonfarm) for yourself, you are
ule SE, line 2. But don’t report it on
ject to social security tax is $128,400.
Long Schedule SE, line 5a; it isn’t con-
self-employed.
sidered church employee income. Also,
You also must pay SE tax on your
General
include on line 2:
share of certain partnership income and
Instructions
The rental value of a home or an
your guaranteed payments. See
Partner-
allowance for a home furnished to you
ship Income or
Loss, later.
(including payments for utilities), and
Who Must File Schedule SE
The value of meals and lodging
Employees of Churches and
You must file Schedule SE if:
provided to you, your spouse, and your
Church Organizations
The amount on line 4 of Short
dependents for your employer's conven-
If you had church employee income of
Schedule SE or line 4c of Long Sched-
ience.
$108.28 or more, you must pay SE tax.
ule SE is $400 or more, or
However, don’t include on line 2:
Church employee income is wages you
You had church employee income
Retirement benefits you received
received as an employee (other than as a
of $108.28 or more. (Income from serv-
from a church plan after retirement, or
minister, a member of a religious order,
ices you performed as a minister, mem-
The rental value of a home or an
or a Christian Science practitioner) of a
ber of a religious order, or Christian Sci-
allowance for a home furnished to you
church or qualified church-controlled or-
ence practitioner isn't church employee
(including payments for utilities) after
ganization that has a certificate in effect
income.) See
Employees of Churches
retirement.
electing an exemption from employer
and Church
Organizations.
If you were a duly ordained minister
social security and Medicare taxes.
Exception to filing Schedule SE. If
who was an employee of a church and
you filed Form 4029 or Form 4361 and
you must pay SE tax, the unreimbursed
Ministers, Members of Religious
received IRS approval, you may not
business expenses that you incurred as a
Orders, and Christian Science
need to file Schedule SE. See
Ministers,
church employee are not deductible as
Practitioners
Members of Religious Orders, and
an itemized deduction for income tax
Christian Science Practitioners
and
purposes. However, when figuring SE
In most cases, you must pay SE tax on
Members of Certain Religious Sects
for
tax, subtract on line 2 the allowable ex-
salaries and other income for services
information on how to report your
penses from your self-employment earn-
you performed as a minister, a member
self-employment earnings.
ings and attach an explanation.
of a religious order who hasn’t taken a
vow of poverty, or a Christian Science
If you were a U.S. citizen or resident
practitioner. But if you filed Form 4361
alien serving outside the United States
and received IRS approval, you will be
as a minister or member of a religious
exempt from paying SE tax on those net
order and you must pay SE tax, you
SE-1
Nov 14, 2018
Cat. No. 24334P
U.S. Citizens or Resident Aliens
can’t reduce your net earnings by the
tional social security agreements. If your
Living Outside the United States
foreign earned income exclusion or the
self-employment income is subject to
foreign housing exclusion or deduction.
SE tax, complete Schedule SE and file it
If you are a self-employed U.S. citizen
with your Form 1040NR.
See Pub. 517 for details.
or resident alien living outside the Uni-
ted States, in most cases you must pay
Chapter 11 Bankruptcy Cases
Members of Certain Religious
SE tax. You can’t reduce your foreign
Sects
While you are a debtor in a chapter 11
earnings from self-employment by your
bankruptcy case, your net profit or loss
foreign earned income exclusion.
If you have conscientious objections to
from self-employment (for example,
Exception. The United States has social
social security insurance because of
from Schedule C or Schedule F) won't
security agreements with many countries
your membership in and belief in the
be included in your Form 1040 income.
to eliminate dual taxes under two social
teachings of a religious sect recognized
Instead, it will be included on the in-
security systems. Under these agree-
as being in existence at all times since
come tax return (Form 1041) of the
ments, you generally must pay social se-
December 31, 1950, and which has pro-
bankruptcy estate. However, you (not
curity and Medicare taxes to only the
vided a reasonable level of living for its
the bankruptcy estate) are responsible
dependent members, you are exempt
country in which you live.
for paying SE tax on your net earnings
from SE tax if you received IRS appro-
The United States now has social se-
from self-employment.
val by filing Form 4029. In this case,
curity agreements with the following
Enter on the dotted line to the left of
don’t file Schedule SE. Instead, enter
countries: Australia, Austria, Belgium,
Schedule SE, line 3, “Chap. 11 bank-
“Exempt—Form 4029” on Schedule 4
Brazil, Canada, Chile, Czech Republic,
ruptcy income” and the amount of your
(Form 1040), line 57, or Form 1040NR,
Denmark, Finland, France, Germany,
net profit or (loss). Combine that
line 55. See Pub. 517 for details.
Greece, Hungary, Ireland, Italy, Japan,
amount with the total of lines 1a, 1b, and
Luxembourg, the Netherlands, Norway,
U.S. Citizens Employed by
2 (if any) and enter the result on line 3.
Poland, Portugal, South Korea, Spain,
Foreign Governments or
For other reporting requirements, see
Slovak Republic, Sweden, Switzerland,
International Organizations
Chapter 11 Bankruptcy Cases in the In-
the United Kingdom, and Uruguay.
structions for Form 1040.
If you have questions about interna-
You must pay SE tax on income you
More Than One Business
tional social security agreements, or to
earned as a U.S. citizen employed by a
see if any additional agreements have
foreign government (or, in certain cases,
If you had two or more businesses sub-
been entered into, you can visit the So-
by a wholly owned instrumentality of a
ject to self-employment tax, your net
cial Security Administration's (SSA's)
foreign government or an international
earnings from self-employment are the
International
Programs
website
at
organization under the International Or-
combined net earnings from all of your
SSA.gov/international. The website also
ganizations Immunities Act) for services
businesses. If you had a loss in one busi-
provides contact information for ques-
performed in the United States, Puerto
ness, it reduces the income from anoth-
tions about benefits and the agreements.
Rico, Guam, American Samoa, the
er. Figure the combined SE tax on one
Commonwealth of the Northern Mariana
If your self-employment income is
Schedule SE.
Islands, or the U.S. Virgin Islands. Re-
exempt from SE tax, you should get a
Joint Returns
port income from this employment on
statement from the appropriate agency
either Short or Long Schedule SE,
of the foreign country verifying that
Show the name of the spouse with
line 2. If you performed services else-
your self-employment income is subject
self-employment income on Sched-
where as an employee of a foreign gov-
to social security coverage in that coun-
ule SE. If both spouses have self-em-
ernment or an international organization,
try. If the foreign country won't issue the
ployment income, each must file a sepa-
those earnings are exempt from SE tax.
statement, contact the SSA Office of In-
rate Schedule SE. However, if one
ternational Programs. Don’t complete
Exception—Dual citizens.
A person
spouse qualifies to use Short Sched-
Schedule SE. Instead, attach a copy of
with dual U.S.-foreign citizenship gener-
ule SE (front of form) and the other
the statement to Form 1040 and enter
must use Long Schedule SE (back of
ally is considered to be a U.S. citizen for
“Exempt, see attached statement” on
form), both can use the same form. One
social security purposes. However, if
Schedule 4 (Form 1040), line 57.
you are a U.S. citizen and also a citizen
spouse should complete the front and the
of a country with which the United
other the back.
Nonresident Alien
States has a bilateral social security
Include the total profits or losses
agreement, other than Canada or Italy,
If you are a self-employed nonresident
from all businesses on Form 1040. Enter
your work for the government of that
alien living in the United States, you
the combined SE tax on Schedule 4
foreign country is always exempt from
must pay SE tax if an international so-
(Form 1040), line 57.
U.S. social security taxes. For further in-
cial security agreement in effect deter-
Community Income
formation about these agreements, see
mines that you are covered under the
the exception shown in the next section.
U.S. social security system. See
Excep-
If any of the income from a business (in-
tion
under U.S. Citizens or Resident Ali-
cluding farming) is community income,
ens Living Outside the United States,
then the income and deductions are re-
earlier, for information about interna-
ported as follows.
SE-2
If only one spouse participates in
Figure the amount to enter on line 3 as
you report on Form 4835, Farm Rental
the business, all of the income from that
follows.
Income and Expenses, each of you must
business is the self-employment earn-
If the allocated amount is a net
file a separate Form 4835 to report your
ings of the spouse who carried on the
profit, subtract it from the total of lines
share of farm rental income based on
business.
1a, 1b, and 2.
crops or livestock produced by the ten-
If both spouses participate, the in-
If the allocated amount is a loss,
ant. Don’t file Schedule SE unless you
come and deductions are allocated to the
treat it as a positive amount and add it to
have other income subject to the SE tax.
spouses based on their distributive
the total of lines 1a, 1b, and 2.
Fiscal Year Filers
shares.
Community income included on
If your tax year is a fiscal year, use the
If either or both spouses are part-
!
Schedule(s) C, C-EZ, or F must
tax rate and annual earnings limit that
ners in a partnership, see
Partnership In-
be divided for income tax pur-
CAUTION
apply at the time the fiscal year begins.
come or
Loss, later.
poses based on the community property
Don’t prorate the tax or annual earnings
If both spouses elected to treat the
laws of your state. See Pub. 555 for
limit for a fiscal year that overlaps the
business as a qualifying joint venture,
more information.
date of a change in the tax or annual
see
Qualified Joint
Ventures, later.
earnings limit.
Qualified Joint Ventures
Married filing separately. If you and
your spouse had community income and
If you and your spouse materially partic-
file separate returns, attach Schedule SE
Line Instructions
ipate as the only members of a jointly
to the return of each spouse with
owned and operated business, and you
self-employment earnings under the
file a joint return for the tax year, you
rules described earlier. Also attach
Read the flowchart on page 1 of Sched-
can make a joint election to be taxed as
Schedule(s) C, C-EZ, or F (showing the
ule SE to see if you can use Sec-
a qualified joint venture instead of a
spouse's share of community income
tion A—Short Schedule SE, or if you
partnership. For information on what it
and expenses) to the return of each
must use Section B—Long Schedule SE.
means to materially participate, see Ma-
spouse.
For either section, you will need to fig-
terial participation in the Instructions
ure your net earnings from self-employ-
Spouse who carried on the business.
for Schedule C.
ment. To find out what is included as net
If you are the only spouse who carried
To make this election, you must di-
earnings from self-employment, see
Net
on the business, you must include on
vide all items of income, gain, loss, de-
Earnings From
Self-Employment, later.
Schedule SE, line 3, the net profit or
duction, and credit attributable to the
(loss) reported on the other spouse's
Enter all negative amounts in
business between you and your spouse
Schedule C, C-EZ, or F (except in those
parentheses.
TIP
in accordance with your respective inter-
cases described later under
Income and
ests in the venture. Each of you must file
Losses Not Included in Net Earnings
You Have Only Church
a separate Schedule C, C-EZ, or F. On
From
Self-Employment). Enter on the
each line of your separate Schedule C,
Employee Income Subject
dotted line to the left of Schedule SE,
C-EZ, or F, you must enter your share of
to SE Tax
line 3, “Community income taxed to
the applicable income, deduction, or
spouse” and the amount of any net profit
loss. Each of you also must file a sepa-
If your only income subject to SE tax is
or (loss) allocated to your spouse as
rate Schedule SE to pay SE tax, as appli-
church employee income (described ear-
community
income.
Combine
that
cable.
lier under
Employees of Churches and
amount with the total of lines 1a, 1b, and
Church
Organizations), skip lines 1
For more information on qualified
2. Enter the result on line 3.
through 4b. Enter -0- on line 4c and go
joint ventures, go to IRS.gov/QJV.
Spouse who didn’t carry on the busi­
to line 5a.
Rental real estate business. If you and
ness. If you aren’t the spouse who car-
Note. Income from services you per-
your spouse make the election to be
ried on the business and you had no oth-
form as a minister, a member of a reli-
taxed as a qualified joint venture for
er income subject to SE tax, enter “Ex-
gious order, or a Christian Science prac-
your rental real estate business, the in-
empt community income” on Schedule 4
titioner isn’t church employee income.
come generally isn’t subject to SE tax.
(Form 1040), line 57, or Form 1040NR,
Line 1b (Short or Long
To indicate that election, be sure to
line 55. Don’t file Schedule SE.
check the “QJV” box in Part I, line 2, of
Schedule SE)
But if you have $400 or more of oth-
each Schedule E that the rental property
er earnings subject to SE tax, you must
is listed on. Don’t file Schedule SE un-
If you were receiving social security re-
file Schedule SE. Include on Sched-
less you have other income subject to
tirement or social security disability
ule SE, line 1a or 2, the net profit or
SE tax. For an exception to this income
benefits at the time you received your
(loss) from Schedule(s) C, C-EZ, or F
not being subject to SE tax, see item 3
Conservation Reserve Program (CRP)
allocated to you as community income.
under
Other Income and Losses Inclu-
payment(s), enter the amount of your
On the dotted line to the left of Sched-
ded in Net Earnings From Self-Employ-
taxable CRP payment(s) on line 1b.
ule SE, line 3, enter “Exempt communi-
ment, later.
These payments are included on Sched-
ty income” and the allocated amount.
ule F, line 4b, or listed on Schedule K-1
If you and your spouse make the
(Form 1065), box 20, code Z (if a 2017
election for a farm rental business that
SE-3
Schedule K-1) or code AH (if a 2018
amount of wages subject to Additional
spouse's net earnings from self-employ-
Schedule K-1).
Medicare Tax.
ment.
Line 4 (Short Schedule SE)
Share Farming
Use Form 8959, Additional Medicare
Tax, to figure this tax. For more infor-
If line 4 is less than $400 and you have
You are considered self-employed if you
mation, see the Instructions for Form
an amount on line 1b, combine lines 1a
produce crops or livestock on someone
8959, or go to IRS.gov/ADMT.
and 2.
else's land for a share of the crops or
If the total of lines 1a and 2 is
livestock produced (or a share of the
Net Earnings From
$434 or more, file Schedule SE (com-
proceeds from the sale of them). This
Self-Employment
pleted through line 4) with your tax re-
applies even if you paid another person
turn. Enter -0- on Schedule 4 (Form
(an agent) to do the actual work or man-
In most cases, net earnings include your
1040), line 57, or Form 1040NR,
agement for you. Report your net earn-
net profit from a farm or nonfarm busi-
line 55.
ings for income tax purposes on Sched-
ness.
If the total of lines 1a and 2 is less
ule F (Form 1040) and for SE tax purpo-
Partnership Income or Loss
than $434, don’t file Schedule SE un-
ses on Schedule SE. See Pub. 225 for
less you choose to use an optional meth-
details.
If you were a general or limited partner
od for figuring your SE tax.
Other Income and Losses
in a partnership, include on line 1a or
Lines 4a Through 4c (Long
Included in Net Earnings
line 2, whichever applies, the amount of
Schedule SE)
net earnings from self-employment from
From Self-Employment
Schedule K-1 (Form 1065), box 14,
If both lines 4a and 4c are less than $400
1. Rental income from a farm if, as
code A, and Schedule K-1 (Form
and you have an amount on line 1b,
landlord, you materially participated in
1065-B), box 9, code J1. General part-
combine lines 1a and 2.
the production or management of the
ners should reduce this amount by cer-
If the total of lines 1a and 2 is
production of farm products on this
tain expenses before entering it on
$434 or more, file Schedule SE (com-
land. This income is farm earnings. To
Schedule SE. See your Schedule K-1 in-
pleted through line 4c) with your tax re-
determine whether you materially par-
structions. If you reduce the amount you
turn. Enter -0- on Schedule 4 (Form
ticipated in farm management or pro-
enter on Schedule SE, you must attach
1040), line 57,* or Form 1040NR,
duction, don’t consider the activities of
an explanation. Limited partners should
line 55.*
any agent who acted for you. The mate-
include only guaranteed payments for
If the total of lines 1a and 2 is less
rial participation tests for landlords are
services actually rendered to or on be-
than $434, don’t file Schedule SE un-
explained in Pub. 225.
half of the partnership.
less you choose to use an optional meth-
2. Cash or a payment-in-kind from
od to figure your SE tax.
If a partner died and the partnership
the Department of Agriculture for par-
*If you also have church employee in-
continued, include in self-employment
ticipating in a land diversion program.
come (described earlier under
Employ-
income the deceased's distributive share
3. Payments for the use of rooms or
ees of Churches and Church Organiza-
of the partnership's ordinary income or
other space when you also provided sub-
tions), also complete lines 5a and 5b.
loss through the end of the month in
stantial services for the convenience of
Complete the rest of Schedule SE, as ap-
which he or she died. See section
your tenants. Examples are hotel rooms,
propriate.
1402(f).
boarding houses, tourist camps or
Additional Medicare Tax
If you were married and both you and
homes, trailer parks, parking lots, ware-
your spouse were partners in a partner-
houses, and storage garages. See Pub.
A 0.9% Additional Medicare Tax may
ship, each of you must report your net
334 for more information.
apply to you if the total amount from
earnings from self-employment from the
4. Income from the retail sale of
line 4 (Short Schedule SE) or line 6
partnership. Each of you must file a sep-
newspapers and magazines if you were
(Long Schedule SE) of all your Sched-
arate Schedule SE and report the part-
age 18 or older and kept the profits.
ules SE exceeds one of the following
nership income or loss on Schedule E
5. Income you receive as a direct
threshold amounts (based on your filing
(Form 1040), Part II, for income tax pur-
seller. Newspaper carriers or distributors
status).
poses. If only one of you was a partner
of any age are direct sellers if certain
Married filing jointly—$250,000
in a partnership, the spouse who was the
conditions apply. See Pub. 334 for de-
Married filing
partner must report his or her net earn-
tails.
separately—$125,000
ings from self-employment from the
Single, Head of household, or
6. Amounts received by current or
partnership.
Qualifying widow(er)—$200,000
former self-employed insurance agents
Community income. Your own distrib-
and salespersons that are:
utive share of partnership income is in-
If you have both wages and self-em-
a. Paid after retirement but figured
cluded in figuring your net earnings
ployment income, the threshold amount
as a percentage of commissions received
from self-employment. Unlike the divi-
for applying the Additional Medicare
from the paying company before retire-
sion of that income between spouses for
Tax on the self-employment income is
ment,
figuring income tax, no part of your
reduced (but not below zero) by the
share can be included in figuring your
SE-4
b. Renewal commissions, or
(except as a fee basis government em-
b. The sale, exchange, involuntary
ployee as explained in item 8 under
Oth-
conversion, or other disposition of prop-
c. Deferred commissions paid after
er Income and Losses Included in Net
erty unless the property is stock in trade
retirement for sales made before retire-
Earnings From
Self-Employment, earli-
or other property that would be includi-
ment.
er).
ble in inventory, or held primarily for
However, certain termination pay-
sale to customers in the ordinary course
2. Fees received for services per-
ments received by former insurance
of the business; or
formed as a notary public. If you had no
salespersons aren’t included in net earn-
other income subject to SE tax, enter
c. Certain transactions in timber,
ings from self-employment (as ex-
“Exempt—Notary”
on
Schedule
4
coal, or domestic iron ore.
plained in item 10 under
Income and
(Form 1040), line 57. Don’t file Sched-
Losses Not Included in Net Earnings
9. Net operating losses from other
ule SE. However, if you had other earn-
From
Self-Employment).
years.
ings of $400 or more subject to SE tax,
7. Income of certain crew members
10. Termination payments you re-
enter
“Exempt—Notary”
and
the
of fishing vessels with crews of normal-
ceived as a former insurance salesperson
amount of your net profit as a notary
ly fewer than 10 people. See Pub. 334
if all of the following conditions are
public from Schedule C or Sched-
for details.
met.
ule C-EZ on the dotted line to the left of
8. Fees as a state or local govern-
a. The payment was received from
Schedule SE, line 3. Subtract that
ment employee if you were paid only on
an insurance company because of serv-
amount from the total of lines 1a, 1b,
a fee basis and the job wasn’t covered
ices you performed as an insurance
and 2, and enter the result on line 3.
under a federal-state social security cov-
salesperson for the company.
3. Income you received as a retired
erage agreement.
b. The payment was received after
partner under a written partnership plan
9. Interest received in the course of
termination of your agreement to per-
that provides for lifelong periodic retire-
any trade or business, such as interest on
form services for the company.
ment payments if you had no other inter-
notes or accounts receivable.
est in the partnership and didn’t perform
c. You didn’t perform any services
services for it during the year.
10. Fees and other payments received
for the company after termination and
by you for services as a director of a
before the end of the year in which you
4. Income from real estate rentals if
corporation.
received the payment.
you didn’t receive the income in the
course of a trade or business as a real es-
11. Recapture amounts under sections
d. You entered into a covenant not
tate dealer. Report this income on
179 and 280F that you included in gross
to compete against the company for at
income because the business use of the
Schedule E.
least a 1-year period beginning on the
property dropped to 50% or less. Don’t
date of termination.
5. Income from farm rentals (includ-
include amounts you recaptured on the
ing rentals paid in crop shares) if, as
e. The amount of the payment de-
disposition of property. See Form 4797.
landlord, you didn’t materially partici-
pended primarily on policies sold by or
pate in the production or management of
12. Generally, fees you received as a
credited to your account during the last
the production of farm products on the
professional fiduciary. This also may ap-
year of the agreement, or the extent to
land. See Pub. 225 for details. Report
ply to fees paid to you as a nonprofes-
which those policies remain in force for
sional fiduciary if the fees relate to ac-
this income on Form 4835. Use two
some period after termination, or both.
Forms 4835 if you and your spouse
tive participation in the operation of the
f. The amount of the payment didn’t
made an election to be taxed as a quali-
estate's business, or the management of
depend to any extent on length of serv-
fied joint venture.
an estate that required extensive man-
ice or overall earnings from services
agement activities over a long period of
6. Payments you receive from the
performed for the company (regardless
time.
Conservation Reserve Program if you
of whether eligibility for the payment
are receiving social security benefits for
13. Gain or loss from section 1256
depended on length of service).
contracts or related property by an op-
retirement or disability. Deduct these
Statutory Employee Income
payments on line 1b of Schedule SE.
tions or commodities dealer in the nor-
mal course of dealing in or trading sec-
If you were a statutory employee, don’t
7. Dividends on shares of stock and
tion 1256 contracts.
include the net profit or (loss) from
interest on bonds, notes, or other evi-
Schedule C, line 31 (or the net profit
Income and Losses Not
dence of indebtedness issued with inter-
from Schedule C-EZ, line 3), on Short
est coupons or in registered form by any
Included in Net Earnings
or Long Schedule SE, line 2. But if you
corporation (including those issued by a
From Self-Employment
file Long Schedule SE, be sure to in-
government or its political subdivision),
clude statutory employee social security
if you didn’t receive the income in the
1. Salaries, fees, and other income
wages and tips from Form W-2 on
course of your trade or business as a
subject to social security or Medicare
line 8a.
dealer in stocks or securities.
tax that you received for performing
8. Gain or loss from:
services as an employee, including serv-
ices performed as an employee under the
a. The sale or exchange of a capital
railroad retirement system. This includes
asset;
services performed as a public official
SE-5

Download Instructions for IRS Form 1040 Schedule Se - Self-employment Tax 2018

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