Instructions For Schedule Se (Form 1040) - 2011
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5Department of the Treasury
Internal Revenue Service
2011 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.
The maximum amount of self-em-
farm) for yourself, you are self-employed.
•
ployment income subject to social security
Retirement benefits you received
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-
of certain partnership income and your
Deduction for self-employed health insur-
lowance for a home furnished to you (in-
guaranteed payments. See Partnership In-
ance.
You can no longer reduce your net
cluding payments for utilities) after
come or Loss , later.
self-employment income by the amount of
retirement.
your self-employed health insurance de-
Employees of Churches and
duction (from line 29 of Form 1040 or
If you were a duly ordained minister
Church Organizations
Form 1040NR).
who was an employee of a church and you
must pay SE tax, the unreimbursed busi-
If you had church employee income of
SE tax rate.
The Old Age, Survivors, and
ness expenses that you incurred as a church
$108.28 or more, you must pay SE tax.
Disability Insurance (OASDI) portion of
employee are allowed only as an itemized
Church employee income is wages you re-
the SE tax is reduced by 2%. As a result,
deduction for income tax purposes. How-
ceived as an employee (other than as a min-
the SE tax rate is reduced from 15.3% to
ever, when figuring SE tax, subtract on line
ister or member of a religious order) of a
13.3%.
2 the allowable expenses from your
church or qualified church-controlled or-
self-employment earnings and attach an ex-
ganization that has a certificate in effect
SE tax deduction.
The SE tax deduction is
planation.
electing an exemption from employer so-
revised to reflect an employer’s equivalent
cial security and Medicare taxes.
If you were a U.S. citizen or resident
portion of tax.
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-
Who Must File Schedule SE
clusion or deduction.
formed as a minister, a member of a
religious order who has not taken a vow of
You must file Schedule SE if:
See Pub. 517 for details.
poverty, or a Christian Science practitioner.
•
The amount on line 4 of Short Sched-
Members of Certain Religious
But if you filed Form 4361 and received
ule SE or line 4c of Long Schedule SE is
Sects
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-
•
You had church employee income of
had no other income subject to SE tax,
cial security insurance because of your
$108.28 or more. Income from services you
enter “Exempt — Form 4361” on Form
membership in and belief in the teachings
performed as a minister or a member of a
1040, line 56, or Form 1040NR, line 54.
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,
come. See Employees of Churches and
or more subject to SE tax, see line A at the
1950, and which has provided a reasonable
Church Organizations .
top of Long Schedule SE.
level of living for its dependent members,
you are exempt from SE tax if you received
Note.
Even if you had a loss or a small
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 (discussed
517 for details.
that election.
later).
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 .
employee income. Also, include on line 2:
as a U.S. citizen employed by a foreign
SE-1
Aug 30, 2011
Cat. No. 24334P
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