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Tax Filing

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Tax Filing

Tax filing 7. Tax filing   How To Get Tax Help Table of Contents Outside the U. Tax filing S. Tax filing Low Income Taxpayer Clinics Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Tax filing Free help with your tax return. Tax filing   You can get free help preparing your return nationwide from IRS-certified volunteers. Tax filing The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Tax filing The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Tax filing Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Tax filing In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Tax filing To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Tax filing gov, download the IRS2Go app, or call 1-800-906-9887. Tax filing   As part of the TCE program, AARP offers the Tax-Aide counseling program. Tax filing To find the nearest AARP Tax-Aide site, visit AARP's website at www. Tax filing aarp. Tax filing org/money/taxaide or call 1-888-227-7669. Tax filing For more information on these programs, go to IRS. Tax filing gov and enter “VITA” in the search box. Tax filing Internet. Tax filing    IRS. Tax filing gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Tax filing Download the free IRS2Go app from the iTunes app store or from Google Play. Tax filing Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Tax filing Check the status of your 2013 refund with the Where's My Refund? application on IRS. Tax filing gov or download the IRS2Go app and select the Refund Status option. Tax filing The IRS issues more than 9 out of 10 refunds in less than 21 days. Tax filing Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Tax filing You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Tax filing The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Tax filing Use the Interactive Tax Assistant (ITA) to research your tax questions. Tax filing No need to wait on the phone or stand in line. Tax filing The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Tax filing When you reach the response screen, you can print the entire interview and the final response for your records. Tax filing New subject areas are added on a regular basis. Tax filing  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Tax filing gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Tax filing You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Tax filing The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. Tax filing When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. Tax filing Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. Tax filing You can also ask the IRS to mail a return or an account transcript to you. Tax filing Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. Tax filing gov or by calling 1-800-908-9946. Tax filing Tax return and tax account transcripts are generally available for the current year and the past three years. Tax filing Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Tax filing Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Tax filing If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Tax filing Check the status of your amended return using Where's My Amended Return? Go to IRS. Tax filing gov and enter Where's My Amended Return? in the search box. Tax filing You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Tax filing It can take up to 3 weeks from the date you mailed it to show up in our system. Tax filing Make a payment using one of several safe and convenient electronic payment options available on IRS. Tax filing gov. Tax filing Select the Payment tab on the front page of IRS. Tax filing gov for more information. Tax filing Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. Tax filing Figure your income tax withholding with the IRS Withholding Calculator on IRS. Tax filing gov. Tax filing Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. Tax filing Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. Tax filing gov. Tax filing Request an Electronic Filing PIN by going to IRS. Tax filing gov and entering Electronic Filing PIN in the search box. Tax filing Download forms, instructions and publications, including accessible versions for people with disabilities. Tax filing Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Tax filing gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Tax filing An employee can answer questions about your tax account or help you set up a payment plan. Tax filing Before you visit, check the Office Locator on IRS. Tax filing gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Tax filing If you have a special need, such as a disability, you can request an appointment. Tax filing Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Tax filing Apply for an Employer Identification Number (EIN). Tax filing Go to IRS. Tax filing gov and enter Apply for an EIN in the search box. Tax filing Read the Internal Revenue Code, regulations, or other official guidance. Tax filing Read Internal Revenue Bulletins. Tax filing Sign up to receive local and national tax news and more by email. Tax filing Just click on “subscriptions” above the search box on IRS. Tax filing gov and choose from a variety of options. Tax filing Phone. Tax filing    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Tax filing Download the free IRS2Go app from the iTunes app store or from Google Play. Tax filing Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Tax filing gov, or download the IRS2Go app. Tax filing Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Tax filing The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Tax filing Most VITA and TCE sites offer free electronic filing. Tax filing Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Tax filing Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Tax filing Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Tax filing If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Tax filing The IRS issues more than 9 out of 10 refunds in less than 21 days. Tax filing Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Tax filing Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Tax filing The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Tax filing Note, the above information is for our automated hotline. Tax filing Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Tax filing Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Tax filing You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Tax filing It can take up to 3 weeks from the date you mailed it to show up in our system. Tax filing Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Tax filing You should receive your order within 10 business days. Tax filing Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Tax filing If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Tax filing Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Tax filing The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Tax filing These individuals can also contact the IRS through relay services such as the Federal Relay Service. Tax filing    Outside the U. Tax filing S. Tax filing If you are outside the United States, taxpayer assistance is available by calling the following U. Tax filing S Embassies or consulates. Tax filing    Beijing, China (86) (10) 8531-3983 Frankfurt, Germany (49) (69) 7535-3823 London, England (44) (20) 7894-0477 Paris, France (33) (1) 4312-2555   If you cannot contact one of these offices, taxpayer assistance is also available at (267) 941-1000 (not a toll free call). Tax filing   If you are in a U. Tax filing S. Tax filing territory (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, and U. Tax filing S. Tax filing Virgin Islands) and have a tax question, you can call 1-800-829-1040. Tax filing Walk-in. Tax filing   You can find a selection of forms, publications and services — in-person. Tax filing Products. Tax filing You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Tax filing Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Tax filing Services. Tax filing You can walk in to your local TAC for face-to-face tax help. Tax filing An employee can answer questions about your tax account or help you set up a payment plan. Tax filing Before visiting, use the Office Locator tool on IRS. Tax filing gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Tax filing    Outside the U. Tax filing S. Tax filing If you are outside the United States during the filing period (January to mid-June), you can get the necessary federal tax forms and publications from most U. Tax filing S. Tax filing Embassies and consulates. Tax filing   Walk-in taxpayer assistance is available at the following U. Tax filing S. Tax filing Embassies or consulates. Tax filing    Beijing, China (86) (10) 8531-3983 Frankfurt, Germany (49) (69) 7535-3811 London, England (44) (20) 7894-0477 Paris, France (33) (1) 4312-2555   Please contact the office for times when assistance will be available. Tax filing Mail. Tax filing   You can send your order for forms, instructions, and publications to the address below. Tax filing You should receive a response within 10 business days after your request is received. Tax filing Internal Revenue Service 1201 N. Tax filing Mitsubishi Motorway Bloomington, IL 61705-6613      Outside the U. Tax filing S. Tax filing If you are outside the United States, you can get tax assistance by writing to the address below. Tax filing  Internal Revenue Service International Accounts Philadelphia, PA 19255-0725 Taxpayer Advocate Service. Tax filing   The Taxpayer Advocate Service Is Here to Help You. Tax filing The Taxpayer Advocate Service (TAS) is your voice at the IRS. Tax filing Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Tax filing   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Tax filing We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Tax filing You face (or your business is facing) an immediate threat of adverse action. Tax filing You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Tax filing   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Tax filing Here's why we can help: TAS is an independent organization within the IRS. Tax filing Our advocates know how to work with the IRS. Tax filing Our services are free and tailored to meet your needs. Tax filing We have offices in every state, the District of Columbia, and Puerto Rico. Tax filing   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. Tax filing  How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Tax filing If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Tax filing Outside the U. Tax filing S. Tax filing   If you live outside of the United States, you can call the Taxpayer Advocate at (787) 522-8601 in English or (787) 522-8600 in Spanish. Tax filing You can contact the Taxpayer Advocate at: Internal Revenue Service Taxpayer Advocate Service City View Plaza, 48 Carr 165, Guaynabo, P. Tax filing R. Tax filing 00968-8000 Low Income Taxpayer Clinics Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. Tax filing Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Tax filing Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Tax filing Prev  Up  Next   Home   More Online Publications
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Tax filing 12. Tax filing   Self-Employment Tax Table of Contents What's New for 2013 What's New for 2014 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Why Pay Self-Employment Tax? How To Pay Self-Employment TaxReplacing a lost social security card. Tax filing Name change. Tax filing Penalty for underpayment of estimated tax. Tax filing Who Must Pay Self-Employment Tax?Limited partner. Tax filing Community property. Tax filing Figuring Self-Employment EarningsLandlord Participation in Farming Methods for Figuring Net EarningsRegular Method Farm Optional Method Nonfarm Optional Method Using Both Optional Methods Reporting Self-Employment Tax What's New for 2013 Tax rates. Tax filing  For tax years beginning in 2013, the social security part of the self-employment tax increases from 10. Tax filing 4% to 12. Tax filing 4%. Tax filing The Medicare part of the tax remains at 2. Tax filing 9%. Tax filing As a result, the self-employment tax is increased from 13. Tax filing 3% to 15. Tax filing 3%. Tax filing Additional Medicare Tax. Tax filing . Tax filing  For tax years beginning in 2013, a 0. Tax filing 9% Additional Medicare Tax applies to your Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income above a threshold amount. Tax filing Use Form 8959, Additional Medicare Tax, to figure this tax. Tax filing For more information, see the Instructions for Form 8959. Tax filing Maximum net earnings. Tax filing  The maximum net self-employment earnings subject to the social security part (12. Tax filing 4%) of the self-employment tax increased to $113,700 for 2013. Tax filing There is no maximum limit on earnings subject to the Medicare part (2. Tax filing 9%). Tax filing What's New for 2014 Maximum net earnings. Tax filing  The maximum net self-employment earnings subject to the social security part of the self-employment tax for 2014 will be discussed in the 2013 Publication 334. Tax filing Introduction Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Tax filing It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. Tax filing You usually have to pay SE tax if you are self-employed. Tax filing You are usually self-employed if you operate your own farm on land you either own or rent. Tax filing You have to figure SE tax on Schedule SE (Form 1040). Tax filing Farmers who have employees may have to pay the employer's share of social security and Medicare taxes, as well. Tax filing See chapter 13 for information on employment taxes. Tax filing Self-employment tax rate. Tax filing   For tax years beginning in 2013, the self-employment tax rate is 15. Tax filing 3%. Tax filing The rate consists of two parts: 12. Tax filing 4% for social security (old-age, survivors, and disability insurance) and 2. Tax filing 9% for Medicare (hospital insurance). Tax filing Topics - This chapter discusses: Why pay self-employment tax How to pay self-employment tax Who must pay self-employment tax Figuring self-employment earnings Landlord participation in farming Methods for figuring net earnings Reporting self-employment tax Useful Items - You may want to see: Publication 541 Partnerships Form (and Instructions) 1040 U. Tax filing S. Tax filing Individual Income Tax Return Sch F (Form 1040) Profit or Loss From Farming Sch SE (Form 1040) Self-Employment Tax 1065 U. Tax filing S. Tax filing Return of Partnership Income Sch K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. Tax filing See chapter 16 for information about getting publications and forms. Tax filing Why Pay Self-Employment Tax? Social security benefits are available to self-employed persons just as they are to wage earners. Tax filing Your payments of SE tax contribute to your coverage under the social security system. Tax filing Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. Tax filing How to become insured under social security. Tax filing   You must be insured under the social security system before you begin receiving social security benefits. Tax filing You are insured if you have the required number of credits (also called quarters of coverage). Tax filing Earning credits in 2013. Tax filing   You can earn a maximum of four credits per year. Tax filing For 2013, you earn one credit for each $1,160 of combined wages and self-employment earnings subject to social security tax. Tax filing You need $4,640 ($1,160 × 4) of combined wages and self-employment earnings subject to social security tax to earn four credits in 2013. Tax filing It does not matter whether the income is earned in 1 quarter or is spread over 2 or more quarters. Tax filing For an explanation of the number of credits you must have to be insured and the benefits available to you and your family under the social security program, consult your nearest Social Security Administration (SSA) office or visit the SSA website at www. Tax filing socialsecurity. Tax filing gov. Tax filing Making false statements to get or to increase social security benefits may subject you to penalties. Tax filing The Social Security Administration (SSA) time limit for posting self-employment earnings. Tax filing   Generally, the SSA will give you credit only for self-employment earnings reported on a tax return filed within 3 years, 3 months, and 15 days after the tax year you earned the income. Tax filing    If you file your tax return or report a change in your self-employment earnings after the SSA time limit for posting self-employment earnings, the SSA may change its records, but only to remove or reduce the amount. Tax filing The SSA will not change its records to increase your self-employment earnings after the SSA time limit listed above. Tax filing How To Pay Self-Employment Tax To pay SE tax, you must have a social security number (SSN) or an individual taxpayer identification number (ITIN). Tax filing This section explains how to: Obtain an SSN or ITIN, and Pay your SE tax using estimated tax. Tax filing An ITIN does not entitle you to social security benefits. Tax filing Obtaining an ITIN does not change your immigration or employment status under U. Tax filing S. Tax filing law. Tax filing Obtaining a social security number. Tax filing   If you have never had an SSN, apply for one using Form SS-5, Application for a Social Security Card. Tax filing The application is also available in Spanish. Tax filing You can get this form at any Social Security office or by calling 1-800-772-1213. Tax filing    You can also download Form SS-5 from the Social Security Administration website at  www. Tax filing socialsecurity. Tax filing gov. Tax filing   If you have a social security number from the time you were an employee, you must use that number. Tax filing Do not apply for a new one. Tax filing Replacing a lost social security card. Tax filing   If you have a number but lost your card, file Form SS-5. Tax filing You will get a new card showing your original number, not a new number. Tax filing Name change. Tax filing   If your name has changed since you received your social security card, complete Form SS-5 to report a name change. Tax filing Obtaining an individual taxpayer identification number. Tax filing   The IRS will issue you an ITIN, for tax use only, if you are a nonresident or resident alien and you do not have, and are not eligible to get, an SSN. Tax filing To apply for an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number. Tax filing You can get this form by calling 1-800-829-3676. Tax filing For more information on ITINs, see Publication 1915, Understanding Your IRS Individual Taxpayer Identification Number. Tax filing Form W-7 and Publication 1915 are also available in Spanish. Tax filing    You can also download Form W-7 from the IRS website at IRS. Tax filing gov. Tax filing Paying estimated tax. Tax filing   Estimated tax is the method used to pay tax (including SE tax) on income not subject to withholding. Tax filing You generally have to make estimated tax payments if you expect to owe tax, including SE tax, of $1,000 or more when you file your return. Tax filing Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay the tax. Tax filing   However, if at least two-thirds of your gross income for 2013 or 2014 was from farming and you file your 2014 Form 1040 and pay all the tax due by March 2, 2015, you do not have to pay any estimated tax. Tax filing For more information about estimated tax for farmers, see chapter 15. Tax filing Penalty for underpayment of estimated tax. Tax filing   You may have to pay a penalty if you do not pay enough estimated tax by its due date. Tax filing Who Must Pay Self-Employment Tax? You must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. Tax filing The SE tax rules apply no matter how old you are and even if you are already receiving social security or Medicare benefits. Tax filing Aliens. Tax filing   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. Tax filing S. Tax filing citizens. Tax filing Nonresident aliens are not subject to self-employment tax. Tax filing However, residents of the Virgin Islands, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa are subject to self-employment tax, as they are considered U. Tax filing S. Tax filing residents for self-employment tax purposes. Tax filing For more information on aliens, see Publication 519, U. Tax filing S. Tax filing Tax Guide for Aliens. Tax filing Are you self-employed?   You are self-employed if you carry on a trade or business (such as running a farm) as a sole proprietor, an independent contractor, a member of a partnership, or are otherwise in business for yourself. Tax filing A trade or business is generally an activity carried on for a livelihood or in good faith to make a profit. Tax filing Share farmer. Tax filing   You are a self-employed farmer under an income-sharing arrangement if both the following apply. Tax filing You produce a crop or raise livestock on land belonging to another person. Tax filing Your share of the crop or livestock, or the proceeds from their sale, depends on the amount produced. Tax filing Your net farm profit or loss from the income-sharing arrangement is reported on Schedule F (Form 1040) and included in your self-employment earnings. Tax filing   If you produce a crop or livestock on land belonging to another person and are to receive a specified rate of pay, a fixed sum of money, or a fixed quantity of the crop or livestock, and not a share of the crop or livestock or their proceeds, you may be either self-employed or an employee of the landowner. Tax filing This will depend on whether the landowner has the right to direct or control your performance of services. Tax filing Example. Tax filing A share farmer produces a crop on land owned by another person on a 50-50 crop-share basis. Tax filing Under the terms of their agreement, the share farmer furnishes the labor and half the cost of seed and fertilizer. Tax filing The landowner furnishes the machinery and equipment used to produce and harvest the crop, and half the cost of seed and fertilizer. Tax filing The share farmer is provided a house in which to live. Tax filing The landowner and the share farmer decide on a cropping plan. Tax filing The share farmer is a self-employed farmer for purposes of the agreement to produce the crops, and the share farmer's part of the profit or loss from the crops is reported on Schedule F (Form 1040) and included in self-employment earnings. Tax filing The tax treatment of the landowner is discussed later under Landlord Participation in Farming. Tax filing Contract farming. Tax filing   Under typical contract farming arrangements, the grower receives a fixed payment per unit of crops or finished livestock delivered to the processor or packing company. Tax filing Since the grower typically furnishes labor and bears some production risk, the payments are reported on Schedule F and are therefore subject to self-employment tax. Tax filing 4-H Club or FFA project. Tax filing   If an individual participates in a 4-H Club or Future Farmers of America (FFA) project, any net income received from sales or prizes related to the project may be subject to income tax. Tax filing Report the net income as “Other income” on line 21 of Form 1040. Tax filing If necessary, attach a statement showing the gross income and expenses. Tax filing The net income may not be subject to SE tax if the project is primarily for educational purposes and not for profit, and is completed by the individual under the rules and economic restrictions of the sponsoring 4-H or FFA organization. Tax filing Such a project is generally not considered a trade or business. Tax filing Partners in a partnership. Tax filing   Generally, you are self-employed if you are a member of a partnership that carries on a trade or business. Tax filing Limited partner. Tax filing   If you are a limited partner, your partnership income is generally not subject to SE tax. Tax filing However, guaranteed payments you receive for services you perform for the partnership are subject to SE tax and should be reported to you in box 14 of your Schedule K-1 (Form 1065). Tax filing Business Owned and Operated by Spouses. Tax filing   If you and your spouse jointly own and operate a farm as an unincorporated business and share in the profits and losses, you are partners in a partnership whether or not you have a formal partnership agreement. Tax filing You must file Form 1065, instead of Schedule F, unless you make a joint election to be treated as a qualified joint venture. Tax filing Making this election will allow you to avoid the complexity of Form 1065 but still give each spouse credit for social security earnings on which retirement benefits are based. Tax filing Qualified joint venture. Tax filing   If you and your spouse each materially participate as the only members of a jointly owned and operated farm, and you file a joint tax return for the tax year, you can make a joint election to be treated as a qualified joint venture instead of a partnership for the tax year. Tax filing For an explanation of “material participation,” see the instructions for Schedule C, line G, and the instructions for Schedule F, line E. Tax filing   To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Tax filing Each of you must file a separate Schedule F and a separate Schedule SE. Tax filing For more information, see Qualified Joint Venture in the Instructions for Schedule SE (Form 1040). Tax filing Spouse employee. Tax filing   If your spouse is your employee, not your partner, you must withhold and pay social security and Medicare taxes for him or her. Tax filing For more information about employment taxes, see chapter 13. Tax filing Community property. Tax filing   If you are a partner and your distributive share of any income or loss from a trade or business carried on by the partnership is community property, treat your share as your self-employment earnings. Tax filing Do not treat any of your share as self-employment earnings of your spouse. Tax filing Figuring Self-Employment Earnings Farmer. Tax filing   If you are self-employed as a farmer, use Schedule F (Form 1040) to figure your self-employment earnings. Tax filing Partnership income or loss. Tax filing   If you are a member of a partnership that carries on a trade or business, the partnership should report your self-employment earnings in box 14, code A, of your Schedule K-1 (Form 1065). Tax filing Box 14 of Schedule K-1 may also provide amounts for gross farming or fishing income (code B) and gross nonfarm income (code C). Tax filing Use these amounts if you use the farm or nonfarm optional method to figure net earnings from self-employment (see Methods for Figuring Net Earnings , later). Tax filing   If you are a general partner, you may need to reduce these reported earnings by amounts you claim as a section 179 deduction, unreimbursed partnership expenses, or depletion on oil and gas properties. Tax filing   If the amount reported is a loss, include only the deductible amount when you figure your total self-employment earnings. Tax filing   For more information, see the Partner's Instructions for Schedule K-1 (Form 1065). Tax filing   For general information on partnerships, see Publication 541. Tax filing More than one business. Tax filing   If you have self-employment earnings from more than one trade, business, or profession, you generally must combine the net profit or loss from each to determine your total self-employment earnings. Tax filing A loss from one business reduces your profit from another business. Tax filing However, do not combine earnings from farm and nonfarm businesses if you are using one of the optional methods (discussed later) to figure net earnings. Tax filing Community property. Tax filing   If any of the income from a farm or business, other than a partnership, is community property under state law, it is included in the self-employment earnings of the spouse carrying on the trade or business. Tax filing Lost income payments. Tax filing   Lost income payments received from insurance or other sources for reducing or stopping farming activities are included in self-employment earnings. Tax filing These include USDA payments to compensate for lost income resulting from reductions in tobacco quotas and allotments. Tax filing Even if you are not farming when you receive the payment, it is included in self-employment earnings if it relates to your farm business (even though it is temporarily inactive). Tax filing A connection exists if it is clear the payment would not have been made but for your conduct of your farm business. Tax filing Gain or loss. Tax filing   A gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers is not included in self-employment earnings. Tax filing It does not matter whether the disposition is a sale, exchange, or involuntary conversion. Tax filing For example, gains or losses from the disposition of the following types of property are not included in self-employment earnings. Tax filing Investment property. Tax filing Depreciable property or other fixed assets used in your trade or business. Tax filing Livestock held for draft, breeding, sport, or dairy purposes, and not held primarily for sale, regardless of how long the livestock was held, or whether it was raised or purchased. Tax filing Unharvested standing crops sold with land held more than 1 year. Tax filing Timber, coal, or iron ore held for more than 1 year if an economic interest was retained, such as a right to receive coal royalties. Tax filing   A gain or loss from the cutting of timber is not included in self-employment earnings if the cutting is treated as a sale or exchange. Tax filing For more information on electing to treat the cutting of timber as a sale or exchange, see Timber in chapter 8. Tax filing Wages and salaries. Tax filing   Wages and salaries received for services performed as an employee and covered by social security or railroad retirement are not included in self-employment earnings. Tax filing   Wages paid in kind to you for agricultural labor, such as commodity wages, are not included in self-employment earnings. Tax filing Retired partner. Tax filing   Retirement income received by a partner from his or her partnership under a written plan is not included in self-employment earnings if all the following apply. Tax filing The retired partner performs no services for the partnership during the year. Tax filing The retired partner is owed only the retirement payments. Tax filing The retired partner's share (if any) of the partnership capital was fully paid to the retired partner. Tax filing The payments to the retired partner are lifelong periodic payments. Tax filing Conservation Reserve Program (CRP) payments. Tax filing   Under the Conservation Reserve Program (CRP), if you own or operate highly erodible or other specified cropland, you may enter into a longterm contract with the USDA, agreeing to convert to a less intensive use of that cropland. Tax filing You must include the annual rental payments and any onetime incentive payment you receive under the program on Schedule F, lines 4a and 4b. Tax filing Cost share payments you receive may qualify for the costsharing exclusion. Tax filing See Cost-Sharing Exclusion (Improvements), above. Tax filing CRP payments are reported to you on Form 1099G. Tax filing Individuals who are receiving Social Security retirement or disability benefits may exclude CRP payments when calculating self-employment tax. Tax filing See the instructions for Schedule SE (Form 1040). Tax filing Self-employed health insurance deduction. Tax filing   You cannot deduct the self-employed health insurance deduction you report on Form 1040, line 29, from self-employment earnings on Schedule SE (Form 1040). Tax filing Landlord Participation in Farming As a general rule, income and deductions from rentals and from personal property leased with real estate are not included in determining self-employment earnings. Tax filing However, income and deductions from farm rentals, including government commodity program payments received by a landowner who rents land, are included if the rental arrangement provides that the landowner will, and does, materially participate in the production or management of production of the farm products on the land. Tax filing Crop shares. Tax filing   Rent paid in the form of crop shares is included in self-employment earnings for the year you sell, exchange, give away, or use the crop shares if you meet one of the four material participation tests (discussed next) at the time the crop shares are produced. Tax filing Feeding such crop shares to livestock is considered using them. Tax filing Your gross income for figuring your self-employment earnings includes the fair market value of the crop shares when they are used as feed. Tax filing Material participation for landlords. Tax filing   You materially participate if you have an arrangement with your tenant for your participation and you meet one or more of the following tests. Tax filing You do at least three of the following. Tax filing Pay, using cash or credit, at least half the direct costs of producing the crop or livestock. Tax filing Furnish at least half the tools, equipment, and livestock used in the production activities. Tax filing Advise or consult with your tenant. Tax filing Inspect the production activities periodically. Tax filing You regularly and frequently make, or take an important part in making, management decisions substantially contributing to or affecting the success of the enterprise. Tax filing You work 100 hours or more spread over a period of 5 weeks or more in activities connected with agricultural production. Tax filing You do things that, considered in their totality, show you are materially and significantly involved in the production of the farm commodities. Tax filing These tests may be used as general guides for determining whether you are a material participant. Tax filing Example. Tax filing Drew Houston agrees to produce a crop on J. Tax filing Clarke's cotton farm, with each receiving half the proceeds. Tax filing Clarke advises Houston when to plant, spray, and pick the cotton. Tax filing During the growing season, Clarke inspects the crop every few days to determine whether Houston is properly taking care of the crop. Tax filing Houston furnishes all labor needed to grow and harvest the crop. Tax filing The management decisions made by Clarke in connection with the care of the cotton crop and his regular inspection of the crop establish that he participates to a material degree in the cotton production operations. Tax filing The income Clarke receives from his cotton farm is included in his self-employment earnings. Tax filing Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. Tax filing The regular method. Tax filing The farm optional method. Tax filing The nonfarm optional method. Tax filing You must use the regular method unless you are eligible to use one or both of the optional methods. Tax filing See Figure 12-1 , shown later. Tax filing Figure 12-1. Tax filing Can I Use the Optional Methods? Please click here for the text description of the image. Tax filing Figure 12–1. Tax filing Can I Use the Optional Methods? Why use an optional method?   You may want to use the optional methods (discussed later) when you have a loss or a small net profit and any one of the following applies. Tax filing You want to receive credit for social security benefit coverage. Tax filing You incurred child or dependent care expenses for which you could claim a credit. Tax filing (An optional method may increase your earned income, which could increase your credit. Tax filing ) You are entitled to the earned income credit. Tax filing (An optional method may increase your earned income, which could increase your credit. Tax filing ) You are entitled to the additional child tax credit. Tax filing (An optional method may increase your earned income, which could increase your credit. Tax filing ) Effects of using an optional method. Tax filing   Using an optional method could increase your SE tax. Tax filing Paying more SE tax may result in you getting higher social security disability or retirement benefits. Tax filing   If you use either or both optional methods, you must figure and pay the SE tax due under these methods even if you would have had a smaller SE tax or no SE tax using the regular method. Tax filing   The optional methods may be used only to figure your SE tax. Tax filing To figure your income tax, include your actual self-employment earnings in gross income, regardless of which method you use to determine SE tax. Tax filing Regular Method Multiply your total self-employment earnings by 92. Tax filing 35% (. Tax filing 9235) to get your net earnings under the regular method. Tax filing See Short Schedule SE, line 4, or Long Schedule SE, line 4a. Tax filing Net earnings figured using the regular method are also called “actual net earnings. Tax filing ” Farm Optional Method Use the farm optional method only for self-employment earnings from a farming business. Tax filing You can use this method if you meet either of the following tests. Tax filing Your gross farm income is $6,960 or less. Tax filing Your net farm profits are less than $5,024. Tax filing Gross farm income. Tax filing   Your gross farm income is the total of the amounts from: Schedule F (Form 1040), line 9, and Schedule K-1 (Form 1065), box 14, code B (from farm partnerships). Tax filing Net farm profits. Tax filing   Net farm profits generally are the total of the amounts from: Schedule F (Form 1040), line 34, and Schedule K-1 (Form 1065), box 14, code A (from farm partnerships). Tax filing However, you may need to adjust the amount reported on Schedule K-1 if you are a general partner or if it is a loss. Tax filing For more information, see Partnership income or loss , earlier. Tax filing Figuring farm net earnings. Tax filing   If you meet either of the two tests explained above, use Table 12-1. Tax filing Figuring Farm Net Earnings , to figure your net earnings from self-employment under the farm optional method. Tax filing Table 12-1. Tax filing Figuring Farm Net Earnings IF your gross farm income  is. Tax filing . Tax filing . Tax filing THEN your net earnings are equal to. Tax filing . Tax filing . Tax filing $6,960 or less Two-thirds of your gross farm income. Tax filing More than $6,960 $4,640 Optional method can reduce or eliminate SE tax. Tax filing   If your gross farm income is $6,960 or less and your farm net earnings figured under the farm optional method are less than your actual net earnings, you can use the farm optional method to reduce or eliminate your SE tax. Tax filing Your actual net earnings are your net earnings figured using the regular method, explained earlier. Tax filing Example. Tax filing Your gross farm income is $540 and your net farm profit is $460. Tax filing Consequently, your net earnings figured under the farm optional method are $360 (2/3 of $540) and your actual net earnings are $425 (92. Tax filing 35% of $460). Tax filing You owe no SE tax if you use the optional method because your net earnings under the farm optional method are less than $400. Tax filing Nonfarm Optional Method This is an optional method available for determining net earnings from nonfarm self-employment, much like the farm optional method. Tax filing If you are also engaged in a nonfarm business, you may be able to use this method to figure your nonfarm net earnings. Tax filing You can use this method even if you do not use the farm optional method for determining your farm net earnings and even if you have a net loss from your nonfarm business. Tax filing For more information about the nonfarm optional method, see Publication 334. Tax filing You cannot combine farm and nonfarm self-employment earnings to figure your net earnings under either of the optional methods. Tax filing Using Both Optional Methods If you use both optional methods, you must add the net earnings figured under each method to arrive at your total net earnings from self-employment. Tax filing You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. Tax filing If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. Tax filing Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. Tax filing Then, enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. Tax filing Most taxpayers can use Section A–Short Schedule SE to figure their SE tax. Tax filing However, certain taxpayers must use Section B–Long Schedule SE. Tax filing Use the chart on page 1 of Schedule SE to find out which one to use. Tax filing If you have to pay SE tax, you must file Form 1040 (with Schedule SE attached) even if you do not otherwise have to file a federal income tax return. Tax filing Deduction for employer-equivalent portion of self-employment tax. Tax filing   You can deduct the employer-equivalent portion of your SE tax in figuring your adjusted gross income. Tax filing This deduction only affects your income tax. Tax filing It does not affect either your net earnings from self-employment or your SE tax. Tax filing   To deduct the tax, enter on Form 1040, line 27, the amount shown on Section A, Line 6, or Section B, line 13, Deduction for employer-equivalent portion of self-employment tax, of the Schedule SE. Tax filing Joint return. Tax filing   Even if you file a joint return, you cannot file a joint Schedule SE. Tax filing This is true whether one spouse or both spouses have self-employment earnings. Tax filing Your spouse is not considered self-employed just because you are. Tax filing If both of you have self-employment earnings, each of you must complete a separate Schedule SE. Tax filing However, if one spouse uses the Short Schedule SE and the other spouse has to use the Long Schedule SE, both can use the same form. Tax filing Attach both schedules to the joint return. Tax filing If you and your spouse operate a business as a partnership, see Business Owned and Operated by Spouses and Qualified joint venture , earlier, under Who Must Pay Self-Employment Tax . Tax filing Prev  Up  Next   Home   More Online Publications