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1040 Nr Tax Form

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1040 Nr Tax Form

1040 nr tax form Publication 547 - Introductory Material Table of Contents What's New Reminders IntroductionOrdering forms and publications. 1040 nr tax form Tax questions. 1040 nr tax form Useful Items - You may want to see: What's New Section C of Form 4684 for Ponzi-type investment schemes. 1040 nr tax form  Section C of Form 4684 is new for 2013. 1040 nr tax form You must complete Section C if you are claiming a theft loss deduction due to a Ponzi-type investment scheme and are using Revenue Procedure 2009-20, as modified by Revenue Procedure 2011-58. 1040 nr tax form Section C of Form 4684 replaces Appendix A in Revenue Procedure 2009-20. 1040 nr tax form You do not need to complete Appendix A. 1040 nr tax form For details, see Losses from Ponzi-type investment schemes , later. 1040 nr tax form Reminders Future developments. 1040 nr tax form   For the latest information about developments related to Publication 547, such as legislation enacted after it was published, go to www. 1040 nr tax form irs. 1040 nr tax form gov/pub547. 1040 nr tax form Photographs of missing children. 1040 nr tax form  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. 1040 nr tax form Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. 1040 nr tax form You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. 1040 nr tax form Introduction This publication explains the tax treatment of casualties, thefts, and losses on deposits. 1040 nr tax form A casualty occurs when your property is damaged as a result of a disaster such as a storm, fire, car accident, or similar event. 1040 nr tax form A theft occurs when someone steals your property. 1040 nr tax form A loss on deposits occurs when your financial institution becomes insolvent or bankrupt. 1040 nr tax form This publication discusses the following topics. 1040 nr tax form Definitions of a casualty, theft, and loss on deposits. 1040 nr tax form How to figure the amount of your gain or loss. 1040 nr tax form How to treat insurance and other reimbursements you receive. 1040 nr tax form The deduction limits. 1040 nr tax form When and how to report a casualty or theft. 1040 nr tax form The special rules for disaster area losses. 1040 nr tax form Forms to file. 1040 nr tax form   Generally, when you have a casualty or theft, you have to file Form 4684. 1040 nr tax form You may also have to file one or more of the following forms. 1040 nr tax form Schedule A (Form 1040). 1040 nr tax form Form 1040NR, Schedule A (for nonresident aliens). 1040 nr tax form Schedule D. 1040 nr tax form Form 4797. 1040 nr tax form For details on which form to use, see How To Report Gains and Losses , later. 1040 nr tax form Condemnations. 1040 nr tax form   For information on condemnations of property, see Involuntary Conversions in chapter 1 of Publication 544, Sales and Other Dispositions of Assets. 1040 nr tax form Workbooks for casualties and thefts. 1040 nr tax form   Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property), is available to help you make a list of your stolen or damaged personal-use property and figure your loss. 1040 nr tax form It includes schedules to help you figure the loss on your home and its contents, and your motor vehicles. 1040 nr tax form   Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook, is available to help you make a list of your stolen or damaged business or income-producing property and figure your loss. 1040 nr tax form Comments and suggestions. 1040 nr tax form   We welcome your comments about this publication and your suggestions for future editions. 1040 nr tax form   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. 1040 nr tax form NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. 1040 nr tax form Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. 1040 nr tax form   You can send your comments from www. 1040 nr tax form irs. 1040 nr tax form gov/formspubs/. 1040 nr tax form Click on “More Information” and then on “Comment on Tax Forms and Publications”. 1040 nr tax form   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. 1040 nr tax form Ordering forms and publications. 1040 nr tax form   Visit www. 1040 nr tax form irs. 1040 nr tax form gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. 1040 nr tax form Internal Revenue Service 1201 N. 1040 nr tax form Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. 1040 nr tax form   If you have a tax question, check the information available on IRS. 1040 nr tax form gov or call 1-800-829-1040. 1040 nr tax form We cannot answer tax questions sent to either of the above addresses. 1040 nr tax form Useful Items - You may want to see: Publication 523 Selling Your Home 525 Taxable and Nontaxable Income 550 Investment Income and Expenses 551 Basis of Assets 584 Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 584-B Business Casualty, Disaster, and   Theft Loss Workbook Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Form 1040NR, Schedule A Itemized Deductions (for nonresident aliens) Schedule D (Form 1040) Capital Gains and Losses 4684 Casualties and Thefts 4797 Sales of Business Property See How To Get Tax Help near the end of this publication for information about getting publications and forms. 1040 nr tax form Prev  Up  Next   Home   More Online Publications
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The 1040 Nr Tax Form

1040 nr tax form 12. 1040 nr tax form   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. 1040 nr tax form Name change. 1040 nr tax form Penalty for underpayment of estimated tax. 1040 nr tax form Who Must Pay Self-Employment Tax?Limited partner. 1040 nr tax form Community property. 1040 nr tax form 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. 1040 nr tax form  For tax years beginning in 2013, the social security part of the self-employment tax increases from 10. 1040 nr tax form 4% to 12. 1040 nr tax form 4%. 1040 nr tax form The Medicare part of the tax remains at 2. 1040 nr tax form 9%. 1040 nr tax form As a result, the self-employment tax is increased from 13. 1040 nr tax form 3% to 15. 1040 nr tax form 3%. 1040 nr tax form Additional Medicare Tax. 1040 nr tax form . 1040 nr tax form  For tax years beginning in 2013, a 0. 1040 nr tax form 9% Additional Medicare Tax applies to your Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income above a threshold amount. 1040 nr tax form Use Form 8959, Additional Medicare Tax, to figure this tax. 1040 nr tax form For more information, see the Instructions for Form 8959. 1040 nr tax form Maximum net earnings. 1040 nr tax form  The maximum net self-employment earnings subject to the social security part (12. 1040 nr tax form 4%) of the self-employment tax increased to $113,700 for 2013. 1040 nr tax form There is no maximum limit on earnings subject to the Medicare part (2. 1040 nr tax form 9%). 1040 nr tax form What's New for 2014 Maximum net earnings. 1040 nr tax form  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. 1040 nr tax form Introduction Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. 1040 nr tax form It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. 1040 nr tax form You usually have to pay SE tax if you are self-employed. 1040 nr tax form You are usually self-employed if you operate your own farm on land you either own or rent. 1040 nr tax form You have to figure SE tax on Schedule SE (Form 1040). 1040 nr tax form Farmers who have employees may have to pay the employer's share of social security and Medicare taxes, as well. 1040 nr tax form See chapter 13 for information on employment taxes. 1040 nr tax form Self-employment tax rate. 1040 nr tax form   For tax years beginning in 2013, the self-employment tax rate is 15. 1040 nr tax form 3%. 1040 nr tax form The rate consists of two parts: 12. 1040 nr tax form 4% for social security (old-age, survivors, and disability insurance) and 2. 1040 nr tax form 9% for Medicare (hospital insurance). 1040 nr tax form 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. 1040 nr tax form S. 1040 nr tax form Individual Income Tax Return Sch F (Form 1040) Profit or Loss From Farming Sch SE (Form 1040) Self-Employment Tax 1065 U. 1040 nr tax form S. 1040 nr tax form Return of Partnership Income Sch K-1 (Form 1065) Partner's Share of Income, Deductions, Credits, etc. 1040 nr tax form See chapter 16 for information about getting publications and forms. 1040 nr tax form Why Pay Self-Employment Tax? Social security benefits are available to self-employed persons just as they are to wage earners. 1040 nr tax form Your payments of SE tax contribute to your coverage under the social security system. 1040 nr tax form Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits. 1040 nr tax form How to become insured under social security. 1040 nr tax form   You must be insured under the social security system before you begin receiving social security benefits. 1040 nr tax form You are insured if you have the required number of credits (also called quarters of coverage). 1040 nr tax form Earning credits in 2013. 1040 nr tax form   You can earn a maximum of four credits per year. 1040 nr tax form For 2013, you earn one credit for each $1,160 of combined wages and self-employment earnings subject to social security tax. 1040 nr tax form 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. 1040 nr tax form It does not matter whether the income is earned in 1 quarter or is spread over 2 or more quarters. 1040 nr tax form 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. 1040 nr tax form socialsecurity. 1040 nr tax form gov. 1040 nr tax form Making false statements to get or to increase social security benefits may subject you to penalties. 1040 nr tax form The Social Security Administration (SSA) time limit for posting self-employment earnings. 1040 nr tax form   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. 1040 nr tax form    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. 1040 nr tax form The SSA will not change its records to increase your self-employment earnings after the SSA time limit listed above. 1040 nr tax form 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). 1040 nr tax form This section explains how to: Obtain an SSN or ITIN, and Pay your SE tax using estimated tax. 1040 nr tax form An ITIN does not entitle you to social security benefits. 1040 nr tax form Obtaining an ITIN does not change your immigration or employment status under U. 1040 nr tax form S. 1040 nr tax form law. 1040 nr tax form Obtaining a social security number. 1040 nr tax form   If you have never had an SSN, apply for one using Form SS-5, Application for a Social Security Card. 1040 nr tax form The application is also available in Spanish. 1040 nr tax form You can get this form at any Social Security office or by calling 1-800-772-1213. 1040 nr tax form    You can also download Form SS-5 from the Social Security Administration website at  www. 1040 nr tax form socialsecurity. 1040 nr tax form gov. 1040 nr tax form   If you have a social security number from the time you were an employee, you must use that number. 1040 nr tax form Do not apply for a new one. 1040 nr tax form Replacing a lost social security card. 1040 nr tax form   If you have a number but lost your card, file Form SS-5. 1040 nr tax form You will get a new card showing your original number, not a new number. 1040 nr tax form Name change. 1040 nr tax form   If your name has changed since you received your social security card, complete Form SS-5 to report a name change. 1040 nr tax form Obtaining an individual taxpayer identification number. 1040 nr tax form   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. 1040 nr tax form To apply for an ITIN, file Form W-7, Application for IRS Individual Taxpayer Identification Number. 1040 nr tax form You can get this form by calling 1-800-829-3676. 1040 nr tax form For more information on ITINs, see Publication 1915, Understanding Your IRS Individual Taxpayer Identification Number. 1040 nr tax form Form W-7 and Publication 1915 are also available in Spanish. 1040 nr tax form    You can also download Form W-7 from the IRS website at IRS. 1040 nr tax form gov. 1040 nr tax form Paying estimated tax. 1040 nr tax form   Estimated tax is the method used to pay tax (including SE tax) on income not subject to withholding. 1040 nr tax form 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. 1040 nr tax form Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay the tax. 1040 nr tax form   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. 1040 nr tax form For more information about estimated tax for farmers, see chapter 15. 1040 nr tax form Penalty for underpayment of estimated tax. 1040 nr tax form   You may have to pay a penalty if you do not pay enough estimated tax by its due date. 1040 nr tax form 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. 1040 nr tax form The SE tax rules apply no matter how old you are and even if you are already receiving social security or Medicare benefits. 1040 nr tax form Aliens. 1040 nr tax form   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. 1040 nr tax form S. 1040 nr tax form citizens. 1040 nr tax form Nonresident aliens are not subject to self-employment tax. 1040 nr tax form 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. 1040 nr tax form S. 1040 nr tax form residents for self-employment tax purposes. 1040 nr tax form For more information on aliens, see Publication 519, U. 1040 nr tax form S. 1040 nr tax form Tax Guide for Aliens. 1040 nr tax form 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. 1040 nr tax form A trade or business is generally an activity carried on for a livelihood or in good faith to make a profit. 1040 nr tax form Share farmer. 1040 nr tax form   You are a self-employed farmer under an income-sharing arrangement if both the following apply. 1040 nr tax form You produce a crop or raise livestock on land belonging to another person. 1040 nr tax form Your share of the crop or livestock, or the proceeds from their sale, depends on the amount produced. 1040 nr tax form 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. 1040 nr tax form   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. 1040 nr tax form This will depend on whether the landowner has the right to direct or control your performance of services. 1040 nr tax form Example. 1040 nr tax form A share farmer produces a crop on land owned by another person on a 50-50 crop-share basis. 1040 nr tax form Under the terms of their agreement, the share farmer furnishes the labor and half the cost of seed and fertilizer. 1040 nr tax form The landowner furnishes the machinery and equipment used to produce and harvest the crop, and half the cost of seed and fertilizer. 1040 nr tax form The share farmer is provided a house in which to live. 1040 nr tax form The landowner and the share farmer decide on a cropping plan. 1040 nr tax form 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. 1040 nr tax form The tax treatment of the landowner is discussed later under Landlord Participation in Farming. 1040 nr tax form Contract farming. 1040 nr tax form   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. 1040 nr tax form 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. 1040 nr tax form 4-H Club or FFA project. 1040 nr tax form   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. 1040 nr tax form Report the net income as “Other income” on line 21 of Form 1040. 1040 nr tax form If necessary, attach a statement showing the gross income and expenses. 1040 nr tax form 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. 1040 nr tax form Such a project is generally not considered a trade or business. 1040 nr tax form Partners in a partnership. 1040 nr tax form   Generally, you are self-employed if you are a member of a partnership that carries on a trade or business. 1040 nr tax form Limited partner. 1040 nr tax form   If you are a limited partner, your partnership income is generally not subject to SE tax. 1040 nr tax form 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). 1040 nr tax form Business Owned and Operated by Spouses. 1040 nr tax form   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. 1040 nr tax form You must file Form 1065, instead of Schedule F, unless you make a joint election to be treated as a qualified joint venture. 1040 nr tax form 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. 1040 nr tax form Qualified joint venture. 1040 nr tax form   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. 1040 nr tax form For an explanation of “material participation,” see the instructions for Schedule C, line G, and the instructions for Schedule F, line E. 1040 nr tax form   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. 1040 nr tax form Each of you must file a separate Schedule F and a separate Schedule SE. 1040 nr tax form For more information, see Qualified Joint Venture in the Instructions for Schedule SE (Form 1040). 1040 nr tax form Spouse employee. 1040 nr tax form   If your spouse is your employee, not your partner, you must withhold and pay social security and Medicare taxes for him or her. 1040 nr tax form For more information about employment taxes, see chapter 13. 1040 nr tax form Community property. 1040 nr tax form   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. 1040 nr tax form Do not treat any of your share as self-employment earnings of your spouse. 1040 nr tax form Figuring Self-Employment Earnings Farmer. 1040 nr tax form   If you are self-employed as a farmer, use Schedule F (Form 1040) to figure your self-employment earnings. 1040 nr tax form Partnership income or loss. 1040 nr tax form   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). 1040 nr tax form Box 14 of Schedule K-1 may also provide amounts for gross farming or fishing income (code B) and gross nonfarm income (code C). 1040 nr tax form 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). 1040 nr tax form   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. 1040 nr tax form   If the amount reported is a loss, include only the deductible amount when you figure your total self-employment earnings. 1040 nr tax form   For more information, see the Partner's Instructions for Schedule K-1 (Form 1065). 1040 nr tax form   For general information on partnerships, see Publication 541. 1040 nr tax form More than one business. 1040 nr tax form   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. 1040 nr tax form A loss from one business reduces your profit from another business. 1040 nr tax form 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. 1040 nr tax form Community property. 1040 nr tax form   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. 1040 nr tax form Lost income payments. 1040 nr tax form   Lost income payments received from insurance or other sources for reducing or stopping farming activities are included in self-employment earnings. 1040 nr tax form These include USDA payments to compensate for lost income resulting from reductions in tobacco quotas and allotments. 1040 nr tax form 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). 1040 nr tax form A connection exists if it is clear the payment would not have been made but for your conduct of your farm business. 1040 nr tax form Gain or loss. 1040 nr tax form   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. 1040 nr tax form It does not matter whether the disposition is a sale, exchange, or involuntary conversion. 1040 nr tax form For example, gains or losses from the disposition of the following types of property are not included in self-employment earnings. 1040 nr tax form Investment property. 1040 nr tax form Depreciable property or other fixed assets used in your trade or business. 1040 nr tax form 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. 1040 nr tax form Unharvested standing crops sold with land held more than 1 year. 1040 nr tax form 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. 1040 nr tax form   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. 1040 nr tax form For more information on electing to treat the cutting of timber as a sale or exchange, see Timber in chapter 8. 1040 nr tax form Wages and salaries. 1040 nr tax form   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. 1040 nr tax form   Wages paid in kind to you for agricultural labor, such as commodity wages, are not included in self-employment earnings. 1040 nr tax form Retired partner. 1040 nr tax form   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. 1040 nr tax form The retired partner performs no services for the partnership during the year. 1040 nr tax form The retired partner is owed only the retirement payments. 1040 nr tax form The retired partner's share (if any) of the partnership capital was fully paid to the retired partner. 1040 nr tax form The payments to the retired partner are lifelong periodic payments. 1040 nr tax form Conservation Reserve Program (CRP) payments. 1040 nr tax form   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. 1040 nr tax form You must include the annual rental payments and any onetime incentive payment you receive under the program on Schedule F, lines 4a and 4b. 1040 nr tax form Cost share payments you receive may qualify for the costsharing exclusion. 1040 nr tax form See Cost-Sharing Exclusion (Improvements), above. 1040 nr tax form CRP payments are reported to you on Form 1099G. 1040 nr tax form Individuals who are receiving Social Security retirement or disability benefits may exclude CRP payments when calculating self-employment tax. 1040 nr tax form See the instructions for Schedule SE (Form 1040). 1040 nr tax form Self-employed health insurance deduction. 1040 nr tax form   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). 1040 nr tax form 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. 1040 nr tax form 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. 1040 nr tax form Crop shares. 1040 nr tax form   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. 1040 nr tax form Feeding such crop shares to livestock is considered using them. 1040 nr tax form Your gross income for figuring your self-employment earnings includes the fair market value of the crop shares when they are used as feed. 1040 nr tax form Material participation for landlords. 1040 nr tax form   You materially participate if you have an arrangement with your tenant for your participation and you meet one or more of the following tests. 1040 nr tax form You do at least three of the following. 1040 nr tax form Pay, using cash or credit, at least half the direct costs of producing the crop or livestock. 1040 nr tax form Furnish at least half the tools, equipment, and livestock used in the production activities. 1040 nr tax form Advise or consult with your tenant. 1040 nr tax form Inspect the production activities periodically. 1040 nr tax form You regularly and frequently make, or take an important part in making, management decisions substantially contributing to or affecting the success of the enterprise. 1040 nr tax form You work 100 hours or more spread over a period of 5 weeks or more in activities connected with agricultural production. 1040 nr tax form You do things that, considered in their totality, show you are materially and significantly involved in the production of the farm commodities. 1040 nr tax form These tests may be used as general guides for determining whether you are a material participant. 1040 nr tax form Example. 1040 nr tax form Drew Houston agrees to produce a crop on J. 1040 nr tax form Clarke's cotton farm, with each receiving half the proceeds. 1040 nr tax form Clarke advises Houston when to plant, spray, and pick the cotton. 1040 nr tax form During the growing season, Clarke inspects the crop every few days to determine whether Houston is properly taking care of the crop. 1040 nr tax form Houston furnishes all labor needed to grow and harvest the crop. 1040 nr tax form 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. 1040 nr tax form The income Clarke receives from his cotton farm is included in his self-employment earnings. 1040 nr tax form Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. 1040 nr tax form The regular method. 1040 nr tax form The farm optional method. 1040 nr tax form The nonfarm optional method. 1040 nr tax form You must use the regular method unless you are eligible to use one or both of the optional methods. 1040 nr tax form See Figure 12-1 , shown later. 1040 nr tax form Figure 12-1. 1040 nr tax form Can I Use the Optional Methods? Please click here for the text description of the image. 1040 nr tax form Figure 12–1. 1040 nr tax form 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. 1040 nr tax form You want to receive credit for social security benefit coverage. 1040 nr tax form You incurred child or dependent care expenses for which you could claim a credit. 1040 nr tax form (An optional method may increase your earned income, which could increase your credit. 1040 nr tax form ) You are entitled to the earned income credit. 1040 nr tax form (An optional method may increase your earned income, which could increase your credit. 1040 nr tax form ) You are entitled to the additional child tax credit. 1040 nr tax form (An optional method may increase your earned income, which could increase your credit. 1040 nr tax form ) Effects of using an optional method. 1040 nr tax form   Using an optional method could increase your SE tax. 1040 nr tax form Paying more SE tax may result in you getting higher social security disability or retirement benefits. 1040 nr tax form   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. 1040 nr tax form   The optional methods may be used only to figure your SE tax. 1040 nr tax form To figure your income tax, include your actual self-employment earnings in gross income, regardless of which method you use to determine SE tax. 1040 nr tax form Regular Method Multiply your total self-employment earnings by 92. 1040 nr tax form 35% (. 1040 nr tax form 9235) to get your net earnings under the regular method. 1040 nr tax form See Short Schedule SE, line 4, or Long Schedule SE, line 4a. 1040 nr tax form Net earnings figured using the regular method are also called “actual net earnings. 1040 nr tax form ” Farm Optional Method Use the farm optional method only for self-employment earnings from a farming business. 1040 nr tax form You can use this method if you meet either of the following tests. 1040 nr tax form Your gross farm income is $6,960 or less. 1040 nr tax form Your net farm profits are less than $5,024. 1040 nr tax form Gross farm income. 1040 nr tax form   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). 1040 nr tax form Net farm profits. 1040 nr tax form   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). 1040 nr tax form 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. 1040 nr tax form For more information, see Partnership income or loss , earlier. 1040 nr tax form Figuring farm net earnings. 1040 nr tax form   If you meet either of the two tests explained above, use Table 12-1. 1040 nr tax form Figuring Farm Net Earnings , to figure your net earnings from self-employment under the farm optional method. 1040 nr tax form Table 12-1. 1040 nr tax form Figuring Farm Net Earnings IF your gross farm income  is. 1040 nr tax form . 1040 nr tax form . 1040 nr tax form THEN your net earnings are equal to. 1040 nr tax form . 1040 nr tax form . 1040 nr tax form $6,960 or less Two-thirds of your gross farm income. 1040 nr tax form More than $6,960 $4,640 Optional method can reduce or eliminate SE tax. 1040 nr tax form   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. 1040 nr tax form Your actual net earnings are your net earnings figured using the regular method, explained earlier. 1040 nr tax form Example. 1040 nr tax form Your gross farm income is $540 and your net farm profit is $460. 1040 nr tax form Consequently, your net earnings figured under the farm optional method are $360 (2/3 of $540) and your actual net earnings are $425 (92. 1040 nr tax form 35% of $460). 1040 nr tax form You owe no SE tax if you use the optional method because your net earnings under the farm optional method are less than $400. 1040 nr tax form Nonfarm Optional Method This is an optional method available for determining net earnings from nonfarm self-employment, much like the farm optional method. 1040 nr tax form If you are also engaged in a nonfarm business, you may be able to use this method to figure your nonfarm net earnings. 1040 nr tax form 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. 1040 nr tax form For more information about the nonfarm optional method, see Publication 334. 1040 nr tax form You cannot combine farm and nonfarm self-employment earnings to figure your net earnings under either of the optional methods. 1040 nr tax form 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. 1040 nr tax form You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. 1040 nr tax form If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. 1040 nr tax form Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. 1040 nr tax form Then, enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. 1040 nr tax form Most taxpayers can use Section A–Short Schedule SE to figure their SE tax. 1040 nr tax form However, certain taxpayers must use Section B–Long Schedule SE. 1040 nr tax form Use the chart on page 1 of Schedule SE to find out which one to use. 1040 nr tax form 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. 1040 nr tax form Deduction for employer-equivalent portion of self-employment tax. 1040 nr tax form   You can deduct the employer-equivalent portion of your SE tax in figuring your adjusted gross income. 1040 nr tax form This deduction only affects your income tax. 1040 nr tax form It does not affect either your net earnings from self-employment or your SE tax. 1040 nr tax form   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. 1040 nr tax form Joint return. 1040 nr tax form   Even if you file a joint return, you cannot file a joint Schedule SE. 1040 nr tax form This is true whether one spouse or both spouses have self-employment earnings. 1040 nr tax form Your spouse is not considered self-employed just because you are. 1040 nr tax form If both of you have self-employment earnings, each of you must complete a separate Schedule SE. 1040 nr tax form 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. 1040 nr tax form Attach both schedules to the joint return. 1040 nr tax form 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 . 1040 nr tax form Prev  Up  Next   Home   More Online Publications