Instructions For Form 1040-Ss - U.s. Self-Employment Tax Return (Including The Additional Child Tax Credit For Bona Fide Residents Of Puerto Rico) - 2017 Page 11
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14trade or other property that would be
income. If you have church employee
gross farm income (not less than zero), or
includible in inventory, or held mainly for
income see
Church
Employees, earlier.
$5,200. This method can increase or
sale to customers in the ordinary course of
Also complete lines 5a and 5b and the rest
decrease your net self-employment farm
the business.
of Part V, as appropriate.
earnings. You can use this method even if
your farming business had a loss.
9. Net operating losses from other
Line 8b
years.
For a farm partnership, figure your
If you received tips of $20 or more in any
10. Termination payments you
share of gross income based on the
month and did not report the full amount to
received as a former insurance
partnership agreement. With guaranteed
your employer, you must file Form 4137
salesperson if all of the following
payments, your share of the partnership's
with Form 1040-SS (see instructions for
conditions are met.
gross income is your guaranteed
Part I,
Line
6, earlier). Enter on line 8b the
payments plus your share of the gross
a. The payment was received from an
amount from Form 4137, line 10.
income after it is reduced by all
insurance company because of services
Line 8c
guaranteed payments made by the
you performed as an insurance
partnership. If you were a limited partner,
If you are an employee who received
salesperson for the company.
include only guaranteed payments for
wages from an employer who did not
b. The payment was received after
services you actually rendered to or on
withhold social security and Medicare tax,
termination of your agreement to perform
behalf of the partnership.
you must file Form 8919 with Form
services for the company.
1040-SS (see instructions for Part I,
Nonfarm Optional Method
c. You did not perform any services
Line
5, earlier). Enter on line 8c the
for the company after termination and
You may be able to use this method to
amount from Form 8919, line 10.
before the end of the year in which you
figure your net earnings from nonfarm
received the payment.
Part VI—Optional Methods
self-employment if your net nonfarm
profits were less than $5,631, and also
d. You entered into a covenant not to
To Figure Net Earnings
less than 72.189% of your gross nonfarm
compete against the company for at least
The optional methods may give you credit
income. Net nonfarm profits are the total
a 1-year period beginning on the date of
toward your social security coverage even
of the amounts from Part IV, line 27, and
termination.
though you have a loss or a small amount
your distributive share from other than
e. The amount of the payment
of income from self-employment. But the
farm partnerships.
depended primarily on policies sold by or
optional methods may require you to pay
credited to your account during the last
To use this method, you also must be
SE tax when you would otherwise not be
year of the agreement, or the extent to
regularly self-employed. You meet this
required to pay.
which those policies remain in force for
requirement if your actual net earnings
some period after termination, or both.
If you are filing a joint return and both
from self-employment were $400 or more
you and your spouse choose to use an
f.
The amount of the payment did not
in 2 of the 3 years preceding the year you
optional method to figure net earnings
depend to any extent on length of service
use the nonfarm optional method. The net
from self-employment, you must each
or overall earnings from services
earnings of $400 or more could be from
complete and attach a separate Part VI.
either farm or nonfarm earnings or both.
performed for the company (regardless of
The net earnings include your distributive
whether eligibility for the payment
You can change the method after you
depended on length of service).
share of partnership income or loss
file your return. That is, you can change
subject to SE tax.
Line 1b
from the regular to the optional method or
from the optional to the regular method.
Use of the nonfarm optional method
If you were receiving social security
To do this, file a new Form 1040-SS. See
from nonfarm self-employment is limited to
retirement or social security disability
the instructions under
Amended
Returns,
5 years. The 5 years do not have to be
benefits at the time you received your
later.
consecutive.
Conservation Reserve Program (CRP)
payment(s), include the amount of your
Using the optional methods may
Under this method, report in Part VI,
qualify bona fide residents of
taxable CRP payment(s) in the total on
TIP
line 4, the smaller of: two-thirds of your
line 1b. The amount of these payments is
Puerto Rico (see Days of
gross nonfarm income (not less than
included in Part III, line 6, and in
presence in a U.S. territory, under
zero), or the amount in Part VI, line 3. But
information received from farm
Disaster Relief, earlier) to claim the
you can't report less than your actual net
additional child tax credit or give them a
partnerships showing your distributive
earnings from nonfarm self-employment.
larger credit.
share.
Figure your share of gross income from
Lines 4a Through 4c
Farm Optional Method
a nonfarm partnership in the same manner
If both lines 4a and 4c are less than $400
as a farm partnership. For details, see
You may use this method to figure your
and you have deducted CRP payments on
Farm Optional
Method, earlier.
net earnings from farm self-employment if
line 1b, combine lines 1a and 2.
your gross farm income was $7,800 or
Using Both Optional Methods
If the total of lines 1a and 2 is $434 or
less, or your net farm profits were less
more, complete Part V through line 4c.
If you have both farm and nonfarm
than $5,631. Net farm profits are the total
Enter “-0-” in Part I, line 3, unless you also
earnings, and can use both optional
of the amounts from Part III, line 36, and
have church employee income. If you also
methods, you can report less than your
your distributive share from farm
have church employee income, see
total actual net earnings from farm and
partnerships, minus the amount you would
Church
Employees, earlier. Also complete
nonfarm self-employment, but you can't
have entered in Part V, line 1b, had you
lines 5a and 5b and the rest of Part V, as
report less than your actual net earnings
not used the optional method.
appropriate.
from nonfarm self-employment alone.
If the total of lines 1a and 2 is less than
There is no limit on how many years
If you use both methods to figure net
$434, do not complete Part V unless you
you can use this method.
earnings from self-employment, you can't
choose to use an optional method to figure
Under this method, report in Part VI,
report more than $5,200 of net earnings
your SE tax or you have church employee
line 2, the smaller of: two-thirds of your
from self-employment.
Instructions for Form 1040-SS (2017)
SS-11
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