Self-Employment

Taxpayers must file Schedule SE if they have net earnings from self-employment of ______ or more, other than church employee income; or church employee income of $108.28 or more.

$400

Self-employed persons are entitled to deduct one-half of their self employment tax on Line 27 of Form 1040. When Self-employed and filing a Schedule SE, Social Security is taxed at _____ %, and Medicare is taxed at ______% - totaling 15.3%.

12.4%, and 2.90%

Total expenses include the total amount of all deductible business expenses actually paid during the year. If business expenses total more than $5,000, the taxpayer must use Schedule C. Examples of these expenses include:

Advertising Car and truck expenses Insurance and Interest

1040 ValuePak's Asset Center will automatically calculate depreciation for all assets. You'll simply enter the the basic items affecting the amount of depreciation described below:

Basis of the property Recovery period for the property Depreciation method used

Gross receipts, includes all receipts from a trade or business, including income from:

Cash 1099 MISC

Self Employment Income or loss is first reported on:

Either Schedule C-EZ, Net Profit from Business, and then the total amount is transferred to Form 1040, line 12 Schedule C, Profit or Loss from Business, and then the total amount is transferred to Form 1040, line 12

Examples of statutory employees include:

Full-time life insurance salespeople Certain agent or commission drivers Traveling salespeople, and certain home workers

Taxpayers can use Schedule C-EZ only if they:

Had business expenses of $5,000 or less Did not have an inventory at any time during the year Were not required to file Form 4562, Depreciation and Amortization

When considering the business use of a home, the taxpayer's deductions for utilities, maintenance, insurance costs, depreciation, or rent, may not exceed the _________ derived from the home office after mortgage interest, real estate tax, and casualty losses are subtracted. If the taxpayer has no income for the year no deduction is allowed. The taxpayer may carry forward to future tax years any deductible expenses disallowed in the current tax year.

Net income

When calculating vehicle expenses, one of the following two methods can be used:

Standard Mileage Rate or Actual Car Expenses