Instructions For Schedule Se (Form 1040) - 2007
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4Department of the Treasury
Internal Revenue Service
2007 Instructions for Schedule SE (Form 1040)
Use Schedule SE (Form 1040) to figure the tax due on net earnings from self-employment.
Self-Employment
The Social Security Administration uses the information from Schedule SE to figure your
benefits under the social security program. This tax applies no matter how old you are and
Tax
even if you are already getting social security or Medicare benefits.
Additional information.
See Pub. 225 or Pub. 334.
ister or member of a religious order) of a
If you were a U.S. citizen or resident
Section references are to the Internal
church or qualified church-controlled or-
alien serving outside the United States as a
Revenue Code unless otherwise noted.
ganization that has a certificate in effect
minister or member of a religious order and
electing an exemption from employer so-
you must pay SE tax, you cannot reduce
cial security and Medicare taxes.
your net earnings by the foreign housing
What’s New
exclusion or deduction.
Ministers and Members of
For 2007, the maximum amount of
See Pub. 517 for details.
Religious Orders
self-employment income subject to social
Members of Certain Religious
security tax is $97,500.
In most cases, you must pay SE tax on sala-
Sects
ries and other income for services you per-
Husband-wife business.
Beginning in
formed as a minister, a member of a
If you have conscientious objections to so-
2007, if you and your spouse file a joint
religious order who has not taken a vow of
cial security insurance because of your
return and jointly own and operate a busi-
poverty, or a Christian Science practitioner.
membership in and belief in the teachings
ness, you may be able to make a joint elec-
But if you filed Form 4361 and received
of a religious sect recognized as being in
tion to be taxed as a qualified joint venture
IRS approval, you will be exempt from
existence at all times since December 31,
instead of a partnership and determine
paying SE tax on those net earnings. If you
1950, and which has provided a reasonable
self-employment tax based on your respec-
had no other income subject to SE tax,
level of living for its dependent members,
tive share of the business. See Qualified
enter “Exempt — Form 4361” on Form
you are exempt from SE tax if you received
Joint Ventures on page SE-2.
1040, line 58. However, if you had other
IRS approval by filing Form 4029. In this
earnings of $400 or more subject to SE tax,
case, do not file Schedule SE. Instead, enter
see line A at the top of Long Schedule SE.
“Exempt — Form 4029” on Form 1040,
line 58. See Pub. 517 for details.
General Instructions
If you have ever filed Form
U.S. Citizens Employed by
2031 to elect social security
Who Must File Schedule SE
Foreign Governments or
coverage on your earnings as a
International Organizations
minister, you cannot revoke
You must file Schedule SE if:
•
that election.
You must pay SE tax on income you earned
Your net earnings from self-employ-
as a U.S. citizen employed by a foreign
ment (see page SE-2) from other than
If you must pay SE tax, include this in-
government (or, in certain cases, by a
church employee income were $400 or
come on either Short or Long Schedule SE,
wholly owned instrumentality of a foreign
more, or
line 2. But do not report it on Long Sched-
•
government or an international organiza-
You had church employee income of
ule SE, line 5a; it is not considered church
tion under the International Organizations
$108.28 or more — see Employees of
employee income. Also, include on line 2:
Immunities Act) for services performed in
•
Churches and Church Organizations be-
The rental value of a home or an al-
the United States, Puerto Rico, Guam,
low.
lowance for a home furnished to you (in-
American Samoa, the Commonwealth of
cluding payments for utilities), and
the Northern Mariana Islands, or the U.S.
Who Must Pay
•
The value of meals and lodging pro-
Virgin Islands. Report income from this
Self-Employment (SE) Tax?
vided to you, your spouse, and your depen-
employment on either Short or Long
dents for your employer’s convenience.
Schedule SE, line 2. If you performed serv-
Self-Employed Persons
ices elsewhere as an employee of a foreign
However, do not include on line 2:
You must pay SE tax if you had net earn-
government or an international organiza-
•
Retirement benefits you received
ings of $400 or more as a self-employed
tion, those earnings are exempt from SE
from a church plan after retirement, or
person. If you are in business for yourself
tax.
•
or you are a farmer, you are self-employed.
The rental value of a home or an al-
U.S. Citizens or Resident Aliens
lowance for a home furnished to you (in-
You must also pay SE tax on your share
Living Outside the United States
cluding payments for utilities) after
of certain partnership income and your
retirement.
If you are a self-employed U.S. citizen or
guaranteed payments. See Partnership In-
resident alien living outside the United
come or Loss on page SE-2.
If you were a duly ordained minister
States, in most cases you must pay SE tax.
who was an employee of a church and you
Employees of Churches and
You cannot reduce your foreign earnings
must pay SE tax, the unreimbursed busi-
from self-employment by your foreign
Church Organizations
ness expenses that you incurred as a church
earned income exclusion.
If you had church employee income of
employee are allowed only as an itemized
$108.28 or more, you must pay SE tax.
deduction for income tax purposes. Sub-
Exception.
The United States has social
Church employee income is wages you re-
tract the allowable amount from your SE
security agreements with many countries to
ceived as an employee (other than as a min-
earnings when figuring your SE tax.
eliminate dual taxes under two social secur-
SE-1
Cat. No. 24334P
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