2010 Instruction 1040 Schedule Se (Form 1040) (Page 2 of 5) in pdf

government (or, in certain cases, by a

17741, Baltimore, MD 21235-7741 USA

Short Schedule SE (front of form) and the

wholly owned instrumentality of a foreign

for information about an agreement, or

other must use Long Schedule SE (back of

government or an international organiza-

form), both can use the same form. One

b. Social Security Administration,

tion under the International Organizations

spouse should complete the front and the

OIO — Totalization, P.O. Box 17769, Bal-

Immunities Act) for services performed in

other the back.

timore, MD 21235-7769 USA for informa-

the United States, Puerto Rico, Guam,

tion about a claim for benefits.

Include the total profits or losses from

American Samoa, the Commonwealth of

all businesses on Form 1040. Enter the

the Northern Mariana Islands, or the U.S.

If your self-employment income is ex-

combined SE tax on Form 1040, line 56.

Virgin Islands. Report income from this

empt from SE tax, you should get a state-

employment on either Short or Long

ment from the appropriate agency of the

Community Income

Schedule SE, line 2. If you performed serv-

foreign country verifying that your

ices elsewhere as an employee of a foreign

If any of the income from a business (in-

self-employment income is subject to so-

government or an international organiza-

cluding farming) is community income,

cial security coverage in that country. If the

tion, those earnings are exempt from SE

then the income and deductions are re-

foreign country will not issue the state-

tax.

ported based on the following.

ment, contact the SSA at the address shown

in (3a) above. Do not complete Schedule

•

Exception — Dual citizens.

A person with

If only one spouse participates in the

SE. Instead, attach a copy of the statement

business, all of the income from that busi-

dual U.S.-foreign citizenship is generally

to Form 1040 and enter “Exempt, see at-

ness is the self-employment earnings of the

considered to be a U.S. citizen for social

tached statement” on Form 1040, line 56.

security purposes. However, if you are a

spouse who carried on the business.

•

U.S. citizen and also a citizen of a country

If both spouses participate, the income

Nonresident Alien

with which the United States has a bilateral

and deductions are allocated to the spouses

If you are a self-employed nonresident

social security agreement, other than Can-

based on their distributive shares.

alien living in the United States, you must

ada or Italy, your work for the government

•

If either or both you and your spouse

pay SE tax if an international social secur-

of that foreign country is always exempt

are partners in a partnership, see Partner-

ity agreement in effect determines that you

from U.S. social security taxes. For further

ship Income or Loss on page SE-3.

are covered under the U.S. social security

information about these agreements, see

•

If you and your spouse elected to treat

system. See Exception under U.S. Citizens

the exception shown in the next section.

or Resident Aliens Living Outside the

the business as a qualifying joint venture,

U.S. Citizens or Resident Aliens

see Qualified Joint Ventures on page SE-3.

United States , earlier, for information

Living Outside the United States

about international social security agree-

Married filing separately.

If you and your

ments. If your self-employment income is

If you are a self-employed U.S. citizen or

spouse had community income and file

subject to SE tax, complete Schedule SE

resident alien living outside the United

separate returns, attach Schedule SE to the

and file it with your Form 1040NR.

States, in most cases you must pay SE tax.

return of the spouse with the self-employ-

You cannot reduce your foreign earnings

Chapter 11 Bankruptcy Cases

ment income. Also, attach Schedule(s) C,

from self-employment by your foreign

C-EZ, or F (showing the spouse’s share of

While you are a debtor in a chapter 11

earned income exclusion.

community income and expenses) to the re-

bankruptcy case, your net profit or loss

turn of each spouse.

Exception.

The United States has social

from self-employment (for example, from

security agreements with many countries to

Schedule C or Schedule F) will not be in-

If you are the spouse who carried on the

eliminate dual taxes under two social secur-

cluded in your Form 1040 income. Instead,

business, you must include on Schedule

ity systems. Under these agreements, you

it will be included on the income tax return

SE, line 3, the net profit or (loss) reported

must generally pay social security and

(Form 1041) of the bankruptcy estate.

on the other spouse’s Schedule C, C-EZ, or

Medicare taxes to only the country you live

However, you (not the bankruptcy estate)

F (except income not included in net earn-

in.

are responsible for paying SE tax on your

ings from self-employment as explained on

net earnings from self-employment.

page SE-4). Enter on the dotted line to the

The United States now has social secur-

left of Schedule SE, line 3, “Community in-

ity agreements with the following coun-

Enter on the dotted line to the left of

come taxed to spouse” and the amount of

tries: Australia, Austria, Belgium, Canada,

Schedule SE, line 3, “Chap. 11 bankruptcy

Chile, Czech Republic, Denmark, Finland,

any net profit or (loss) allocated to your

income” and the amount of your net profit

France, Germany, Greece, Ireland, Italy,

spouse as community income. Combine

or (loss). Combine that amount with the to-

Japan, Luxembourg, the Netherlands, Nor-

that amount with the total of lines 1a, 1b,

tal of lines 1a, 1b, and 2 (if any) and enter

way, Poland, Portugal, South Korea, Spain,

and 2 and enter the result on line 3.

the result on line 3.

Sweden, Switzerland, and the United King-

For other reporting requirements, see

If you are not the spouse who carried on

dom. Additional agreements are expected

the business and you had no other income

page 19 in the instructions for Form 1040.

in the future.

subject to SE tax, enter “Exempt commu-

If you have questions about interna-

More Than One Business

nity income” on Form 1040, line 56, or

tional social security agreements, you can:

Form 1040NR, line 54; do not file Schedule

If you had two or more businesses, your net

SE. However, if you had $400 or more of

1. Visit the Social Security Administra-

earnings from self-employment are the

other earnings subject to SE tax, include on

tion (SSA) website at

combined net earnings from all of your

Schedule SE, line 1a or 2, the net profit or

gov/international

;

businesses. If you had a loss in one busi-

(loss) from Schedule(s) C, C-EZ, or F allo-

ness, it reduces the income from another.

2. Call the SSA’s Office of International

cated to you as community income. Also,

Figure the combined SE tax on one Sched-

Programs at:

enter on the dotted line to the left of Sched-

ule SE.

ule SE, line 3, “Exempt community in-

a. (410) 965-0144 for questions on ben-

come” and the allocated amount. If that

efits under agreements, or

Joint Returns

amount is a net profit, subtract it from the

b. (410) 965-3549 for questions on the

total of lines 1a, 1b, and 2, and enter the

Show the name of the spouse with self-em-

coverage rules of the agreements; or

result on line 3. If that amount is a loss,

ployment income on Schedule SE. If both

3. Write to:

treat it as a positive amount, add it to the

spouses have self-employment income,

total of lines 1a, 1b, and 2, and enter the

a. Social Security Administration, Of-

each must file a separate Schedule SE.

result on line 3.

fice of International Programs, P.O. Box

However, if one spouse qualifies to use

SE-2

2010 Instruction 1040 Schedule Se (Form 1040) Page 2

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