Jeffrey Boron

Schedule C (Profit or Loss from Business) or Schedule F (Profit or Loss from Farming) as appropriate. Schedule SE (Self-Employment Tax). You can get these forms from the IRS on their website at www.irs.gov. Send the tax return and schedules, along with your self-employment tax, to the IRS. Even if you don’t owe any income tax, you must complete Form 1040 and Schedule SE to pay self-employment Social Security tax. This is true even if you already get Social Security benefits. Family business arrangements Family members may operate a business together. For example, a husband and a wife may be partners or run 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). This is the case even if you file a joint income tax return. The partners must decide the amount of net earnings each should report (for example 50% and 50%). Also, a husband and wife who both materially participate in a jointly owned business, and file a joint return, can make an election to be taxed as a qualified joint venture instead of a partnership. Each must file a separate Schedule C or C-EZ.

• income includes any of these: Dividends from shares of stock and interest on bonds, unless you receive them as a dealer in stocks and securities. Interest from loans, unless your business is lending money. Rentals from real estate, unless you’re a real estate dealer or regularly provide services mostly for the convenience of the occupant. Income received from a limited partnership. Optional method If your actual net earnings are less than $400, your earnings can still count for Social Security under an optional method of reporting. You can use the optional method when you have income from farming, non-farm SSA.gov income, or a combination from both. You can use the optional method five times over the course of your life when reporting non-farm income. There is no limit for using the optional method of reporting farm income. Here is how it works: If your gross income from farm self-employment was not more than $9,060 or your net farm profits were less than $6,540, you may report the smaller of 2/3 of gross farm income (not less than 0) or $6,040. If your net income from non-farm self-employment is less than $6,540 and also less than 72.189% of your gross non-farm income, and you had net earnings from self-employment of at least $400 in 2 of the prior 3 years. You can use both the farm and non-farm methods to report earnings. You can report less than your total actual net earnings from farm and non-farm self- employment. However, you can’t report less than your actual net earnings from non-farm self-employment alone. If you use both methods to figure net earnings, you can’t report more than $6,040. NOTE: If you’re a farmer, you can use the optional reporting method every year. Having actual net earnings of at least $400 in a preceding year isn’t necessary. Also, other gross farm, net farm, and non-farm profit amounts may change each year. For additional information, read Tax Guide for Small Business (IRS Publication No. 334) and IRS Schedule SE at www.irs.gov or call 1-800-829-4933. How to report earnings You must complete the following by April 15, after any year in which you have net earnings of $400 or more: Form 1040 (U.S. Individual Income Tax Return).