Instructions For Schedule Se (Form 1040) - 2008
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4Department of the Treasury
Internal Revenue Service
2008 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.
See Pub. 225 or Pub. 334.
Additional information.
Employees of Churches and
lowable expenses from your self-employ-
Section references are to the Internal
ment earnings and attach an explanation.
Church Organizations
Revenue Code unless otherwise noted.
If you had church employee income of
If you were a U.S. citizen or resident
$108.28 or more, you must pay SE tax.
alien serving outside the United States as a
What’s New
Church employee income is wages you re-
minister or member of a religious order and
ceived as an employee (other than as a min-
you must pay SE tax, you cannot reduce
For 2008, the maximum amount of
ister or member of a religious order) of a
your net earnings by the foreign earned in-
self-employment income subject to social
church or qualified church-controlled or-
come exclusion or the foreign housing ex-
security tax is $102,000.
ganization that has a certificate in effect
clusion or deduction.
electing an exemption from employer so-
Conservation Reserve Program (CRP)
See Pub. 517 for details.
cial security and Medicare taxes.
The Food, Conservation, and
payments.
Members of Certain Religious
Ministers and Members of
Energy Act of 2008 excludes CRP pay-
Sects
ments from self-employment tax for indi-
Religious Orders
viduals receiving social security benefits
If you have conscientious objections to so-
In most cases, you must pay SE tax on sala-
for retirement or disability. This is effective
cial security insurance because of your
ries and other income for services you per-
for payments received after December 31,
membership in and belief in the teachings
formed as a minister, a member of a
2007. See the instructions for line 1b on
of a religious sect recognized as being in
religious order who has not taken a vow of
page SE-3.
existence at all times since December 31,
poverty, or a Christian Science practitioner.
1950, and which has provided a reasonable
But if you filed Form 4361 and received
Optional methods to figure net earnings.
level of living for its dependent members,
IRS approval, you will be exempt from
Beginning after December 31, 2007, the
you are exempt from SE tax if you received
paying SE tax on those net earnings. If you
amount of gross and net income from
IRS approval by filing Form 4029. In this
had no other income subject to SE tax,
self-employment you may have when using
case, do not file Schedule SE. Instead, enter
enter “Exempt — Form 4361” on Form
the farm optional method or nonfarm op-
“Exempt — Form 4029” on Form 1040,
1040, line 57. However, if you had other
tional method has increased. This allows
line 57. See Pub. 517 for details.
earnings of $400 or more subject to SE tax,
electing taxpayers to secure up to four cred-
see line A at the top of Long Schedule SE.
its of social security benefits coverage. In
U.S. Citizens Employed by
future years, the thresholds will be indexed
Foreign Governments or
If you have ever filed Form
to maintain that level of coverage. See Op-
International Organizations
2031 to elect social security
tional Methods on page SE-4.
coverage on your earnings as a
You must pay SE tax on income you earned
minister, you cannot revoke
as a U.S. citizen employed by a foreign
that election.
government (or, in certain cases, by a
If you must pay SE tax, include this in-
wholly owned instrumentality of a foreign
General Instructions
come on either Short or Long Schedule SE,
government or an international organiza-
line 2. But do not report it on Long Sched-
tion under the International Organizations
Who Must File Schedule SE
ule SE, line 5a; it is not considered church
Immunities Act) for services performed in
You must file Schedule SE if:
employee income. Also, include on line 2:
the United States, Puerto Rico, Guam,
•
•
American Samoa, the Commonwealth of
Your net earnings from self-employ-
The rental value of a home or an al-
the Northern Mariana Islands, or the U.S.
ment (see page SE-3) from other than
lowance for a home furnished to you (in-
church employee income were $400 or
Virgin Islands. Report income from this
cluding payments for utilities), and
employment on either Short or Long
more, or
•
The value of meals and lodging pro-
•
Schedule SE, line 2. If you performed serv-
You had church employee income of
vided to you, your spouse, and your depen-
ices elsewhere as an employee of a foreign
$108.28 or more — see Employees of
dents for your employer’s convenience.
government or an international organiza-
Churches and Church Organizations later.
However, do not include on line 2:
tion, those earnings are exempt from SE
•
tax.
Retirement benefits you received
Who Must Pay
from a church plan after retirement, or
Self-Employment (SE) Tax?
Exception — Dual citizens.
A person with
•
The rental value of a home or an al-
dual U.S.-foreign citizenship is generally
lowance for a home furnished to you (in-
Self-Employed Persons
considered to be a U.S. citizen for social
cluding payments for utilities) after
security purposes. However, if you are a
You must pay SE tax if you had net earn-
retirement.
U.S. citizen and also a citizen of a country
ings of $400 or more as a self-employed
If you were a duly ordained minister
with which the United States has a bilateral
person. If you are in business (farm or non-
who was an employee of a church and you
social security agreement, other than Can-
farm) for yourself, you are self-employed.
must pay SE tax, the unreimbursed busi-
ada or Italy, your work for the government
You must also pay SE tax on your share
ness expenses that you incurred as a church
of that foreign country is always exempt
of certain partnership income and your
employee are allowed only as an itemized
from U.S. social security taxes. For further
guaranteed payments. See Partnership In-
deduction for income tax purposes. How-
information about these agreements, see
come or Loss on page SE-3.
ever, when figuring SE tax, subtract the al-
the exception shown in the next section.
SE-1
Cat. No. 24334P
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