Instructions For Schedule Se (Form 1040) - 2011 (Page 2 of 5) in pdf

you are exempt from SE tax if you received

Programs website at

combined net earnings from all of your

IRS approval by filing Form 4029. In this

gov/international

;

businesses. If you had a loss in one busi-

case, do not file Schedule SE. Instead, enter

ness, it reduces the income from another.

2. Call the SSA’s Office of International

“Exempt — Form 4029” on Form 1040,

Figure the combined SE tax on one Sched-

Programs at:

line 56, or Form 1040NR, line 54. See Pub.

ule SE.

a. (410) 965-3322 for questions on ben-

517 for details.

Joint Returns

efits under agreements, or

U.S. Citizens Employed by

b. (410) 965-7306 for questions on the

Show the name of the spouse with self-em-

Foreign Governments or

coverage rules of the agreements; or

ployment income on Schedule SE. If both

International Organizations

3. Write to:

spouses have self-employment income,

You must pay SE tax on income you earned

each must file a separate Schedule SE.

a. Social Security Administration, Of-

as a U.S. citizen employed by a foreign

However, if one spouse qualifies to use

fice of International Programs, P.O. Box

government (or, in certain cases, by a

Short Schedule SE (front of form) and the

17741, Baltimore, MD 21235-7741 USA

wholly owned instrumentality of a foreign

other must use Long Schedule SE (back of

for information about an agreement, or

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,

Include the total profits or losses from

tion about a claim for benefits.

American Samoa, the Commonwealth of

all businesses on Form 1040. Enter the

the Northern Mariana Islands, or the U.S.

combined SE tax on Form 1040, line 56.

If your self-employment income is ex-

Virgin Islands. Report income from this

empt from SE tax, you should get a state-

employment on either Short or Long

Community Income

ment from the appropriate agency of the

Schedule SE, line 2. If you performed serv-

The following rules only apply

foreign country verifying that your

ices elsewhere as an employee of a foreign

self-employment income is subject to so-

to persons married for federal

government or an international organiza-

tax purposes. Registered do-

cial security coverage in that country. If the

tion, those earnings are exempt from SE

mestic partners and same-sex

foreign country will not issue the state-

tax.

spouses in California report community in-

ment, contact the SSA at the address shown

Exception — Dual citizens.

A person with

in (3a) above. Do not complete Schedule

come for self-employment tax purposes the

dual U.S.-foreign citizenship is generally

same way they do for income tax purposes.

SE. Instead, attach a copy of the statement

considered to be a U.S. citizen for social

For more information, see Pub. 555.

to Form 1040 and enter “Exempt, see at-

security purposes. However, if you are a

tached statement” on Form 1040, line 56.

If any of the income from a business (in-

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

cluding farming) is community income,

Nonresident Alien

with which the United States has a bilateral

then the income and deductions are re-

social security agreement, other than Can-

If you are a self-employed nonresident

ported based on the following.

ada or Italy, your work for the government

alien living in the United States, you must

•

If only one spouse participates in the

of that foreign country is always exempt

pay SE tax if an international social secur-

business, all of the income from that busi-

from U.S. social security taxes. For further

ity agreement in effect determines that you

ness is the self-employment earnings of the

information about these agreements, see

are covered under the U.S. social security

spouse who carried on the business.

the exception shown in the next section.

system. See Exception under U.S. Citizens

•

If both spouses participate, the income

or Resident Aliens Living Outside the

U.S. Citizens or Resident Aliens

and deductions are allocated to the spouses

United States , earlier, for information

Living Outside the United States

based on their distributive shares.

about international social security agree-

•

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

ments. If your self-employment income is

If either or both you and your spouse

resident alien living outside the United

subject to SE tax, complete Schedule SE

are partners in a partnership, see Partner-

States, in most cases you must pay SE tax.

and file it with your Form 1040NR.

ship Income or Loss , later.

You cannot reduce your foreign earnings

•

If you and your spouse elected to treat

Chapter 11 Bankruptcy Cases

from self-employment by your foreign

the business as a qualifying joint venture,

While you are a debtor in a chapter 11

earned income exclusion.

see Qualified Joint Ventures , later.

bankruptcy case, your net profit or loss

Exception.

The United States has social

If you and your

Married filing separately.

from self-employment (for example, from

security agreements with many countries to

spouse had community income and file

Schedule C or Schedule F) will not be in-

eliminate dual taxes under two social secur-

separate returns, attach Schedule SE to the

cluded in your Form 1040 income. Instead,

ity systems. Under these agreements, you

return of the spouse with the self-employ-

it will be included on the income tax return

must generally pay social security and

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

(Form 1041) of the bankruptcy estate.

Medicare taxes to only the country you live

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

However, you (not the bankruptcy estate)

in.

community income and expenses) to the re-

are responsible for paying SE tax on your

turn of each spouse.

net earnings from self-employment.

The United States now has social secur-

ity agreements with the following coun-

If you are the spouse who carried on the

Enter on the dotted line to the left of

tries: Australia, Austria, Belgium, Canada,

business, you must include on Schedule

Schedule SE, line 3, “Chap. 11 bankruptcy

Chile, Czech Republic, Denmark, Finland,

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

income” and the amount of your net profit

France, Germany, Greece, Ireland, Italy,

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

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

Japan, Luxembourg, the Netherlands, Nor-

F (except in those cases described later

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

way, Poland, Portugal, South Korea, Spain,

under Income and Losses Not Included in

the result on line 3.

Sweden, Switzerland, and the United King-

Net Earnings From Self-Employment ).

For other reporting requirements, see

dom. Additional agreements are expected

Enter on the dotted line to the left of Sched-

Chapter 11 Bankruptcy Cases in the in-

in the future.

ule SE, line 3, “Community income taxed

structions for Form 1040.

to spouse” and the amount of any net profit

If you have questions about interna-

or (loss) allocated to your spouse as com-

More Than One Business

tional social security agreements, you can:

munity income. Combine that amount with

1 . V i s i t t h e S o c i a l S e c u r i t y

If you had two or more businesses, your net

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

Administration’s (SSA’s) International

earnings from self-employment are the

result on line 3.

SE-2

Instructions For Schedule Se (Form 1040) - 2011 Page 2

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