Department of the Treasury
Internal Revenue Service
2010 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.
Who Must Pay
•
Section references are to the Internal
The rental value of a home or an al-
Revenue Code unless otherwise noted.
Self-Employment (SE) Tax
lowance for a home furnished to you (in-
cluding payments for utilities), and
•
Self-Employed Persons
The value of meals and lodging pro-
What’s New
vided to you, your spouse, and your depen-
You must pay SE tax if you had net earn-
dents for your employer’s convenience.
ings of $400 or more as a self-employed
Maximum income subject to social security
person. If you are in business (farm or non-
However, do not include on line 2:
tax.
For 2010, the maximum amount of
farm) for yourself, you are self-employed.
•
self-employment income subject to social
Retirement benefits you received
security tax remains $106,800.
from a church plan after retirement, or
You must also pay SE tax on your share
•
The rental value of a home or an al-
Optional methods to figure net earnings.
of certain partnership income and your
lowance for a home furnished to you (in-
For 2010, the amount of gross and net in-
guaranteed payments. See Partnership In-
cluding payments for utilities) after
come from self-employment you may have
come or Loss on page SE-3.
retirement.
when using the farm optional method or
Employees of Churches and
nonfarm optional method has increased.
If you were a duly ordained minister
Electing taxpayers can secure up to four
Church Organizations
who was an employee of a church and you
credits of social security benefits coverage
must pay SE tax, the unreimbursed busi-
If you had church employee income of
with $4,480 of net earnings in 2010. See
ness expenses that you incurred as a church
$108.28 or more, you must pay SE tax.
Optional Methods on page SE-5.
employee are allowed only as an itemized
Church employee income is wages you re-
deduction for income tax purposes. How-
Deduction for self-employed health insur-
ceived as an employee (other than as a min-
ever, when figuring SE tax, subtract on line
ance.
For 2010, you may be able to reduce
ister or member of a religious order) of a
2 the allowable expenses from your
your net self-employment income by the
church or qualified church-controlled or-
self-employment earnings and attach an ex-
amount of your self-employed health insur-
ganization that has a certificate in effect
planation.
ance deduction on line 29 of Form 1040 or
electing an exemption from employer so-
Form 1040NR. See Line 3 (Short or Long
cial security and Medicare taxes.
If you were a U.S. citizen or resident
Schedule SE) on page SE-3.
alien serving outside the United States as a
Ministers and Members of
minister or member of a religious order and
Religious Orders
you must pay SE tax, you cannot reduce
General Instructions
your net earnings by the foreign earned in-
In most cases, you must pay SE tax on sala-
come exclusion or the foreign housing ex-
ries and other income for services you per-
clusion or deduction.
Who Must File Schedule SE
formed as a minister, a member of a
religious order who has not taken a vow of
See Pub. 517 for details.
You must file Schedule SE if:
poverty, or a Christian Science practitioner.
Members of Certain Religious
•
The amount on line 4 of Short Sched-
But if you filed Form 4361 and received
Sects
ule SE or line 4c of Long Schedule SE is
IRS approval, you will be exempt from
$400 or more, or
paying SE tax on those net earnings. If you
If you have conscientious objections to so-
•
had no other income subject to SE tax,
You had church employee income of
cial security insurance because of your
enter “Exempt — Form 4361” on Form
membership in and belief in the teachings
$108.28 or more. Income from services you
1040, line 56, or Form 1040NR, line 54.
performed as a minister or a member of a
of a religious sect recognized as being in
religious order is not church employee in-
However, if you had other earnings of $400
existence at all times since December 31,
or more subject to SE tax, see line A at the
come. See Employees of Churches and
1950, and which has provided a reasonable
top of Long Schedule SE.
Church Organizations on this page.
level of living for its dependent members,
you are exempt from SE tax if you received
Even if you had a loss or a small
Note.
IRS approval by filing Form 4029. In this
If you have ever filed Form
amount of income from self-employment,
case, do not file Schedule SE. Instead, enter
2031 to elect social security
it may be to your benefit to file Schedule
“Exempt — Form 4029” on Form 1040,
coverage on your earnings as a
SE and use either ‘‘optional method’’ in
line 56, or Form 1040NR, line 54. See Pub.
minister, you cannot revoke
Part II of Long Schedule SE (see page
517 for details.
that election.
SE-5).
U.S. Citizens Employed by
Exception.
If your only self-employment
If you must pay SE tax, include this in-
Foreign Governments or
income was from earnings as a minister,
come on either Short or Long Schedule SE,
International Organizations
member of a religious order, or Christian
line 2. But do not report it on Long Sched-
Science practitioner, see Ministers and
ule SE, line 5a; it is not considered church
You must pay SE tax on income you earned
Members of Religious Orders on this page.
employee income. Also, include on line 2:
as a U.S. citizen employed by a foreign
SE-1
Cat. No. 24334P