Instructions For Schedule Se (Form 1040) - 2017 (Page 2 of 6) in pdf

U.S. Citizens or Resident Aliens

can’t reduce your net earnings by the

tional social security agreements. If your

Living Outside the United States

foreign earned income exclusion or the

self-employment income is subject to

foreign housing exclusion or deduction.

SE tax, complete Schedule SE and file it

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

with your Form 1040NR.

See Pub. 517 for details.

or resident alien living outside the Uni-

ted States, in most cases you must pay

Chapter 11 Bankruptcy Cases

Members of Certain Religious

SE tax. You can’t reduce your foreign

Sects

While you are a debtor in a chapter 11

earnings from self-employment by your

bankruptcy case, your net profit or loss

foreign earned income exclusion.

If you have conscientious objections to

from self-employment (for example,

Exception. The United States has social

social security insurance because of

from Schedule C or Schedule F) won't

security agreements with many countries

your membership in and belief in the

be included in your Form 1040 income.

to eliminate dual taxes under two social

teachings of a religious sect recognized

Instead, it will be included on the in-

security systems. Under these agree-

as being in existence at all times since

come tax return (Form 1041) of the

ments, you generally must pay social se-

December 31, 1950, and which has pro-

bankruptcy estate. However, you (not

curity and Medicare taxes to only the

vided a reasonable level of living for its

the bankruptcy estate) are responsible

dependent members, you are exempt

country in which you live.

for paying SE tax on your net earnings

from SE tax if you received IRS appro-

The United States now has social se-

from self-employment.

val by filing Form 4029. In this case,

curity agreements with the following

Enter on the dotted line to the left of

don’t file Schedule SE. Instead, enter

countries: Australia, Austria, Belgium,

Schedule SE, line 3, “Chap. 11 bank-

“Exempt—Form 4029” on Form 1040,

Canada, Chile, Czech Republic, Den-

ruptcy income” and the amount of your

line 57, or Form 1040NR, line 55. See

mark,

Finland,

France,

Germany,

net profit or (loss). Combine that

Pub. 517 for details.

Greece, Hungary, Ireland, Italy, Japan,

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

Luxembourg, the Netherlands, Norway,

U.S. Citizens Employed by

2 (if any) and enter the result on line 3.

Poland, Portugal, South Korea, Spain,

Foreign Governments or

For other reporting requirements, see

Slovak Republic, Sweden, Switzerland,

International Organizations

Chapter 11 Bankruptcy Cases in the In-

and the United Kingdom.

structions for Form 1040.

If you have questions about interna-

You must pay SE tax on income you

More Than One Business

tional social security agreements, or to

earned as a U.S. citizen employed by a

see if any additional agreements have

foreign government (or, in certain cases,

If you had two or more businesses sub-

been entered into, you can visit the So-

by a wholly owned instrumentality of a

ject to self-employment tax, your net

cial Security Administration's (SSA's)

foreign government or an international

earnings from self-employment are the

International

Programs

website

organization under the International Or-

combined net earnings from all of your

SSA.gov/international. The website also

ganizations Immunities Act) for services

businesses. If you had a loss in one busi-

provides contact information for ques-

performed in the United States, Puerto

ness, it reduces the income from anoth-

tions about benefits and the agreements.

Rico, Guam, American Samoa, the

er. Figure the combined SE tax on one

Commonwealth of the Northern Mariana

If your self-employment income is

Schedule SE.

Islands, or the U.S. Virgin Islands. Re-

exempt from SE tax, you should get a

Joint Returns

port income from this employment on

statement from the appropriate agency

either Short or Long Schedule SE,

of the foreign country verifying that

Show the name of the spouse with

line 2. If you performed services else-

your self-employment income is subject

self-employment income on Sched-

where as an employee of a foreign gov-

to social security coverage in that coun-

ule SE. If both spouses have self-em-

ernment or an international organization,

try. If the foreign country won't issue the

ployment income, each must file a sepa-

those earnings are exempt from SE tax.

statement, contact the SSA Office of In-

rate Schedule SE. However, if one

ternational Programs. Don’t complete

Exception—Dual citizens.

A person

spouse qualifies to use Short Sched-

Schedule SE. Instead, attach a copy of

with dual U.S.-foreign citizenship gener-

ule SE (front of form) and the other

the statement to Form 1040 and enter

must use Long Schedule SE (back of

ally is considered to be a U.S. citizen for

“Exempt, see attached statement” on

form), both can use the same form. One

social security purposes. However, if

Form 1040, line 57.

you are a U.S. citizen and also a citizen

spouse should complete the front and the

of a country with which the United

other the back.

Nonresident Alien

States has a bilateral social security

Include the total profits or losses

agreement, other than Canada or Italy,

If you are a self-employed nonresident

from all businesses on Form 1040. Enter

your work for the government of that

alien living in the United States, you

the combined SE tax on Form 1040,

foreign country is always exempt from

must pay SE tax if an international so-

line 57.

U.S. social security taxes. For further in-

cial security agreement in effect deter-

Community Income

formation about these agreements, see

mines that you are covered under the

the exception shown in the next section.

U.S. social security system. See

Excep-

If any of the income from a business (in-

tion

under U.S. Citizens or Resident Ali-

cluding farming) is community income,

ens Living Outside the United States,

then the income and deductions are re-

earlier, for information about interna-

ported as follows.

SE-2

Instructions For Schedule Se (Form 1040) - 2017 Page 2

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