Instructions For Schedule Se (Form 1040) - 2017 Page 3
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6If only one spouse participates in
Figure the amount to enter on line 3 as
If you and your spouse make the
the business, all of the income from that
follows.
election for a farm rental business that
business is the self-employment earn-
If the allocated amount is a net
you report on Form 4835, Farm Rental
ings of the spouse who carried on the
profit, subtract it from the total of lines
Income and Expenses, each of you must
business.
1a, 1b, and 2.
file a separate Form 4835 to report your
If both spouses participate, the in-
If the allocated amount is a loss,
share of farm rental income based on
come and deductions are allocated to the
treat it as a positive amount and add it to
crops or livestock produced by the ten-
spouses based on their distributive
the total of lines 1a, 1b, and 2.
ant. Don’t file Schedule SE unless you
shares.
have other income subject to the SE tax.
Community income included on
If either or both spouses are part-
Fiscal Year Filers
!
Schedule(s) C, C-EZ, or F must
ners in a partnership, see
Partnership In-
be divided for income tax pur-
CAUTION
If your tax year is a fiscal year, use the
come or
Loss, later.
poses based on the community property
tax rate and annual earnings limit that
If both spouses elected to treat the
laws of your state. See Pub. 555 for
apply at the time the fiscal year begins.
business as a qualifying joint venture,
more information.
Don’t prorate the tax or annual earnings
see
Qualified Joint
Ventures, later.
limit for a fiscal year that overlaps the
Qualified Joint Ventures
Married filing separately. If you and
date of a change in the tax or annual
your spouse had community income and
If you and your spouse materially partic-
earnings limit.
file separate returns, attach Schedule SE
ipate as the only members of a jointly
to the return of each spouse with
owned and operated business, and you
self-employment earnings under the
Line Instructions
file a joint return for the tax year, you
rules described earlier. Also attach
can make a joint election to be taxed as
Schedule(s) C, C-EZ, or F (showing the
a qualified joint venture instead of a
spouse's share of community income
Read the flowchart on page 1 of Sched-
partnership. For information on what it
and expenses) to the return of each
ule SE to see if you can use Sec-
means to materially participate, see Ma-
spouse.
tion A—Short Schedule SE, or if you
terial participation in the Instructions
must use Section B—Long Schedule SE.
Spouse who carried on the business.
for Schedule C.
For either section, you will need to fig-
If you are the only spouse who carried
To make this election, you must di-
ure your net earnings from self-employ-
on the business, you must include on
vide all items of income, gain, loss, de-
ment. To find out what is included as net
Schedule SE, line 3, the net profit or
duction, and credit attributable to the
earnings from self-employment, see
Net
(loss) reported on the other spouse's
business between you and your spouse
Earnings From
Self-Employment, later.
Schedule C, C-EZ, or F (except in those
in accordance with your respective inter-
cases described later under
Income and
Enter all negative amounts in
ests in the venture. Each of you must file
Losses Not Included in Net Earnings
parentheses.
TIP
a separate Schedule C, C-EZ, or F. On
From
Self-Employment). Enter on the
each line of your separate Schedule C,
dotted line to the left of Schedule SE,
You Have Only Church
C-EZ, or F, you must enter your share of
line 3, “Community income taxed to
the applicable income, deduction, or
Employee Income Subject
spouse” and the amount of any net profit
loss. Each of you also must file a sepa-
to SE Tax
or (loss) allocated to your spouse as
rate Schedule SE to pay SE tax, as appli-
community
income.
Combine
that
cable.
If your only income subject to SE tax is
amount with the total of lines 1a, 1b, and
church employee income (described ear-
2. Enter the result on line 3.
For more information on qualified
lier under
Employees of Churches and
joint ventures, go to IRS.gov and enter
Spouse who didn’t carry on the busi
Church
Organizations), skip lines 1
“qualified joint venture” in the search
ness. If you aren’t the spouse who car-
through 4b. Enter -0- on line 4c and go
box.
ried on the business and you had no oth-
to line 5a.
Rental real estate business. If you and
er income subject to SE tax, enter “Ex-
Note. Income from services you per-
your spouse make the election to be
empt community income” on Form
form as a minister, a member of a reli-
taxed as a qualified joint venture for
1040, line 57, or Form 1040NR, line 55.
gious order, or a Christian Science prac-
your rental real estate business, the in-
Don’t file Schedule SE.
titioner isn’t church employee income.
come generally isn’t subject to SE tax.
But if you have $400 or more of oth-
Line 1b (Short or Long
To indicate that election, be sure to
er earnings subject to SE tax, you must
check the “QJV” box in Part I, line 2, of
Schedule SE)
file Schedule SE. Include on Sched-
each Schedule E that the rental property
ule SE, line 1a or 2, the net profit or
If you were receiving social security re-
is listed on. Don’t file Schedule SE un-
(loss) from Schedule(s) C, C-EZ, or F
tirement or social security disability
less you have other income subject to
allocated to you as community income.
benefits at the time you received your
SE tax. For an exception to this income
On the dotted line to the left of Sched-
Conservation Reserve Program (CRP)
not being subject to SE tax, see item 3
ule SE, line 3, enter “Exempt communi-
payment(s), enter the amount of your
under
Other Income and Losses Inclu-
ty income” and the allocated amount.
taxable CRP payment(s) on line 1b.
ded in Net Earnings From Self-Employ-
These payments are included on Sched-
ment, later.
SE-3
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