Instructions For Schedule Se (Form 1040) - 2011 Page 3
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5Community income included
self-employment, see Net Earnings From
Net Earnings From
on Schedule(s) C, C-EZ, or F
Self-Employment .
Self-Employment
must be divided for income tax
purposes based on the commu-
Enter all negative amounts in
In most cases, net earnings include your net
nity property laws of your state. See Pub.
parentheses.
TIP
profit from a farm or nonfarm business.
555 for more information.
Partnership Income or Loss
Qualified Joint Ventures
If you were a general or limited partner in a
If you and your spouse materially partici-
You Have Only Church
partnership, include on line 1a or line 2,
pate (see Material participation in the 2011
Employee Income Subject to
whichever applies, the amount of net earn-
Instructions for Schedule C) as the only
SE Tax
ings from self-employment from Schedule
members of a jointly owned and operated
K-1 (Form 1065), box 14, code A, and
business, and you file a joint return for the
If your only income subject to SE tax is
Schedule K-1 (Form 1065-B), box 9, code
tax year, you can make a joint election to be
church employee income (described earlier
J1. General partners should reduce this
taxed as a qualified joint venture instead of
under Employees of Churches and Church
amount by certain expenses before entering
a partnership.
Organizations ), skip lines 1 through 4b.
it on Schedule SE. See your Schedule K-1
Enter -0- on line 4c and go to line 5a.
To make this election, you must divide
instructions. If you reduce the amount you
all items of income, gain, loss, deduction,
enter on Schedule SE, you must attach an
Note.
Income from services you perform
and credit attributable to the business be-
explanation. Limited partners include only
as a minister of a religious order is not
tween you and your spouse in accordance
guaranteed payments for services actually
with your respective interests in the ven-
church employee income.
rendered to or on behalf of the partnership.
ture. Each of you must file a separate
If a partner died and the partnership
Schedule C, C-EZ, or F. On each line of
Line 1b (Short or Long
continued, include in self-employment in-
your separate Schedule C, C-EZ, or F, you
Schedule SE)
come the deceased’s distributive share of
must enter your share of the applicable in-
the partnership’s ordinary income or loss
come, deduction, or loss. Each of you also
If you were receiving social security retire-
through the end of the month in which he or
must file a separate Schedule SE to pay SE
ment or social security disability benefits at
she died. See section 1402(f).
tax, as applicable.
the time you received your Conservation
If you were married and both you and
Reserve Program (CRP) payment(s), enter
For more information on qualified joint
your spouse were partners in a partnership,
the amount of your taxable CRP
ventures, go to IRS.gov. Enter “qualified
each of you must report your net earnings
payment(s) on line 1b. These payments are
joint venture” in the search box and select
from self-employment from the partner-
included on Schedule F, line 4b, or listed
“Election for Husband and Wife Unincorp-
ship. Each of you must file a separate
on Schedule K-1 (Form 1065), box 20,
orated Businesses.”
Schedule SE and report the partnership in-
code Y.
come or loss on Schedule E (Form 1040),
Rental real estate business.
If you and
Part II, for income tax purposes. If only one
your spouse make the election for your
Line 4 (Short Schedule SE)
of you was a partner in a partnership, the
rental real estate business, the income gen-
spouse who was the partner must report his
If line 4 is less than $400 and you have an
erally is not subject to SE tax. To indicate
or her net earnings from self-employment
amount on line 1b, combine lines 1a and 2.
that election, be sure to check the “QJV”
from the partnership.
box in Part I, line 2, of each Schedule E that
•
If the total of lines 1a and 2 is $434 or
the rental property is listed on. Do not file
Community income.
Your own distribu-
more, file Schedule SE (completed through
Schedule SE unless you have other income
tive share of partnership income is included
line 4) with your tax return. Enter -0- on
subject to SE tax. For an exception to this
in figuring your net earnings from self-em-
Form 1040, line 56, or Form 1040NR, line
income not being subject to SE tax, see
ployment. Unlike the division of that in-
54.
item 3 under Other Income and Losses In-
come between spouses for figuring income
•
If the total of lines 1a and 2 is less than
cluded in Net Earnings From Self-Employ-
tax, no part of your share can be included in
$434, do not file Schedule SE unless you
ment , later).
figuring your spouse’s net earnings from
choose to use an optional method for figur-
self-employment.
If the election is made for a farm rental
ing your SE tax.
business that is not included in self-em-
Share Farming
ployment, file two Forms 4835, Farm
Lines 4a Through 4c (Long
You are considered self-employed if you
Rental Income and Expenses.
Schedule SE)
produced crops or livestock on someone
Fiscal Year Filers
else’s land for a share of the crops or live-
If both lines 4a and 4c are less than $400
stock produced (or a share of the proceeds
If your tax year is a fiscal year, use the tax
and you have an amount on line 1b, com-
from the sale of them). This applies even if
rate and earnings base that apply at the time
bine lines 1a and 2.
you paid another person (an agent) to do the
the fiscal year begins. Do not prorate the
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actual work or management for you. Report
If the total of lines 1a and 2 is $434 or
tax or earnings base for a fiscal year that
your net earnings for income tax purposes
more, file Schedule SE (completed through
overlaps the date of a rate or earnings base
on Schedule F (Form 1040) and for SE tax
line 4c) with your tax return. Enter -0- on
change.
purposes on Schedule SE. See Pub. 225 for
Form 1040, line 56,* or Form 1040NR, line
details.
54.*
•
If the total of lines 1a and 2 is less than
Other Income and Losses
Line Instructions
$434, do not file Schedule SE unless you
Included in Net Earnings
choose to use an optional method to figure
Read the flowchart on page 1 of Schedule
From Self-Employment
your SE tax.
SE to see if you can use Section A — Short
* If you also have church employee income
Schedule SE, or if you must use Section
1. Rental income from a farm if, as land-
(described earlier under Employees of
B — Long Schedule SE. For either section,
lord, you materially participated in the pro-
Churches and Church Organizations ), also
you will need to know what your net earn-
duction or management of the production
complete lines 5a and 5b. Complete the rest
ings from self-employment are. To find out
of farm products on this land. This income
what is included as net earnings from
of Schedule SE, as appropriate.
is farm earnings. To determine whether you
SE-3
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