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Free Tax Filing Hr Block

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Free Tax Filing Hr Block

Free tax filing hr block Publication 541 - Introductory Material Table of Contents Reminder IntroductionTax questions. Free tax filing hr block Ordering forms and publications. Free tax filing hr block Useful Items - You may want to see: Reminder Photographs of missing children. Free tax filing hr block  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Free tax filing hr block Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Free tax filing hr block 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. Free tax filing hr block Introduction This publication provides supplemental federal income tax information for partnerships and partners. Free tax filing hr block It supplements the information provided in the Instructions for Form 1065, U. Free tax filing hr block S. Free tax filing hr block Return of Partnership Income, and the Partner's Instructions for Schedule K-1 (Form 1065). Free tax filing hr block Generally, a partnership does not pay tax on its income but “passes through” any profits or losses to its partners. Free tax filing hr block Partners must include partnership items on their tax returns. Free tax filing hr block For a discussion of business expenses a partnership can deduct, see Publication 535, Business Expenses. Free tax filing hr block Members of oil and gas partnerships should read about the deduction for depletion in chapter 9 of that publication. Free tax filing hr block Certain partnerships must have a tax matters partner (TMP) who is also a general partner. Free tax filing hr block For information on the rules for designating a TMP, see Designation of Tax Matters Partner (TMP) in the Form 1065 instructions and section 301. Free tax filing hr block 6231(a)(7)-1 of the regulations. Free tax filing hr block Many rules in this publication do not apply to partnerships that file Form 1065-B, U. Free tax filing hr block S. Free tax filing hr block Return of Income for Electing Large Partnerships. Free tax filing hr block For the rules that apply to these partnerships, see the instructions for Form 1065-B. Free tax filing hr block However, the partners of electing large partnerships can use the rules in this publication except as otherwise noted. Free tax filing hr block Withholding on foreign partner or firm. Free tax filing hr block   If a partnership acquires a U. Free tax filing hr block S. Free tax filing hr block real property interest from a foreign person or firm, the partnership may have to withhold tax on the amount it pays for the property (including cash, the fair market value of other property, and any assumed liability). Free tax filing hr block If a partnership has income effectively connected with a trade or business in the United States, it must withhold on the income allocable to its foreign partners. Free tax filing hr block A partnership may have to withhold tax on a foreign partner's distributive share of fixed or determinable income not effectively connected with a U. Free tax filing hr block S. Free tax filing hr block trade or business. Free tax filing hr block A partnership that fails to withhold may be held liable for the tax, applicable penalties, and interest. Free tax filing hr block   For more information, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities. Free tax filing hr block Comments and suggestions. Free tax filing hr block   We welcome your comments about this publication and your suggestions for future editions. Free tax filing hr block   You can write to: Internal Revenue Service Tax Forms and Publications  SE:W:CAR:MP:TFP 1111 Constitution Ave. Free tax filing hr block NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Free tax filing hr block Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Free tax filing hr block    You can send us comments from www. Free tax filing hr block irs. Free tax filing hr block gov/formspubs. Free tax filing hr block Click on “More Information” and then on “Comment on Tax Forms and Publications. Free tax filing hr block ”   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. Free tax filing hr block Tax questions. Free tax filing hr block   If you have a tax question, check the information available at IRS. Free tax filing hr block gov or call 1-800-829-4933. Free tax filing hr block We cannot answer tax questions at the address listed above. Free tax filing hr block Ordering forms and publications. Free tax filing hr block    Visit www. Free tax filing hr block irs. Free tax filing hr block gov/formspubs to download forms and publications, call 1-800-829-3676, or write to one of the addresses shown under How To Get Tax Help in the back of this publication. Free tax filing hr block Useful Items - You may want to see: Publication 334 Tax Guide for Small Business 505 Tax Withholding and Estimated Tax 535 Business Expenses 537 Installment Sales 538 Accounting Periods and Methods 544 Sales and Other Dispositions of Assets 551 Basis of Assets 925 Passive Activity and At-Risk Rules 946 How To Depreciate Property See How To Get Tax Help near the end of this publication for information about getting publications and forms. Free tax filing hr block Prev  Up  Next   Home   More Online Publications
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Understanding your CP21E Notice

As a result of your recent audit, we made changes to your tax return for the tax year specified on the notice. You owe money on your taxes as a result of these changes.

Tax publications you may find useful

How to get help

Calling the toll free number listed on the top right corner of your notice is the fastest way to get your questions answered.

You can also authorize someone (such as an accountant) to contact the IRS on your behalf using this Power of Attorney and Declaration of Representative (Form 2848).

Or you may qualify for help from a Low Income Taxpayer Clinic.
 


What you need to do

  • Read your notice and audit report carefully ― these will explain why you owe money on your taxes.
  • Pay the amount owed by the date on the notice's payment coupon.
  • Make payment arrangements if you can't pay the full amount you owe.
  • Contact us if you disagree with the change(s) we made.
  • Correct the copy of your tax return that you kept for your records.

You may want to...


Answers to Common Questions

What should I do if I disagree with the changes you made?
If you've information relevant to your audit that we've not already considered and you've not already paid your bill in full, you may request an Audit Reconsideration. Refer to Publication 3598, What You Should Know About the Audit Reconsideration Process for additional information.

If you've already paid the amount due in full, you must file a formal claim using Form 1040X, Amended U.S. Individual Income Tax Return.

If you don't have additional information to provide, but you disagree with the results of your audit, you may appeal your case to the Appeals Office of the IRS. Refer to Publication 5, Your Appeal Rights and How To Prepare a Protest If You Don’t Agree for additional information.

What happens if I can't pay the full amount I owe?
You can arrange to make a payment plan with us if you can't pay the full amount you owe.

Am I charged interest on the money I owe?
If you don't full pay the amount you owe by the date on the payment coupon, interest will accrue on the unpaid balance after that date.

Will I receive a penalty if I can’t pay the full amount?
Yes, you'll receive a late payment penalty. You can contact us at the number listed on your notice if you’re unable to pay the full amount shown in your specific notice because of circumstances beyond your control. Contact us by the due date of your payment and, depending on your situation, we may be able to remove the penalty.

Can I set up a payment plan?
Yes. Call the toll-free number listed on the top right corner of your notice to discuss payment options or check out more information on payment options and how to make a payment arrangement.

There are other options, such as paying by credit card. Note: There may be a fee to pay by credit card.

What if I need to make another correction to my account?
You'll need to file Form 1040X, Amended U.S. Individual Income Tax Return.

What if I have tried to get answers and after contacting IRS several times have not been successful?
Call Taxpayer Advocate at 1-877-777-4778 or for TTY/TDD 1-800-829-4059.

The changes you have proposed are the result of actions by my spouse that I knew nothing about. Am I responsible for paying this bill?
You may qualify for innocent spouse relief. To request relief, you must file Form 8857, Request for Innocent Spouse Relief no later than 2 years after the date on which the IRS first attempted to collect the tax from you. Refer to Publication 971, Innocent Spouse Relief for additional information.

Page Last Reviewed or Updated: 26-Feb-2014

The Free Tax Filing Hr Block

Free tax filing hr block 10. Free tax filing hr block   Self-Employment (SE) Tax Table of Contents Who Must Pay SE Tax?Special Rules and Exceptions Figuring Earnings Subject to SE Tax Farm Optional Method Using Both Optional Methods Reporting Self-Employment Tax The SE tax rules apply no matter how old you are and even if you are already receiving social security and Medicare benefits. Free tax filing hr block Who Must Pay SE Tax? Generally, you must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more. Free tax filing hr block Use Schedule SE to figure net earnings from self-employment. Free tax filing hr block Sole proprietor or independent contractor. Free tax filing hr block   If you are self-employed as a sole proprietor or independent contractor, you generally use Schedule C or C-EZ (Form 1040) to figure your earnings subject to SE tax. Free tax filing hr block SE tax rate. Free tax filing hr block    For 2013, the SE tax rate on net earnings is 15. Free tax filing hr block 3% (12. Free tax filing hr block 4% social security tax plus 2. Free tax filing hr block 9% Medicare tax). Free tax filing hr block Maximum earnings subject to self-employment tax. Free tax filing hr block    Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. Free tax filing hr block 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. Free tax filing hr block   All of your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. Free tax filing hr block 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. Free tax filing hr block   If your wages and tips are subject to either social security or railroad retirement (tier 1) tax, or both, and total at least $113,700, do not pay the 12. Free tax filing hr block 4% social security part of the SE tax on any of your net earnings. Free tax filing hr block However, you must pay the 2. Free tax filing hr block 9% Medicare part of the SE tax on all your net earnings. Free tax filing hr block Special Rules and Exceptions Aliens. Free tax filing hr block   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. Free tax filing hr block S. Free tax filing hr block citizens. Free tax filing hr block Nonresident aliens are not subject to SE tax unless an international social security agreement in effect determines that they are covered under the U. Free tax filing hr block S. Free tax filing hr block social security system. Free tax filing hr block 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. Free tax filing hr block S. Free tax filing hr block residents for self-employment tax purposes. Free tax filing hr block For more information on aliens, see Publication 519, U. Free tax filing hr block S. Free tax filing hr block Tax Guide for Aliens. Free tax filing hr block Child employed by parent. Free tax filing hr block   You are not subject to SE tax if you are under age 18 and you are working for your father or mother. Free tax filing hr block Church employee. Free tax filing hr block    If you work for a church or a qualified church-controlled organization (other than as a minister or member of a religious order) that elected an exemption from social security and Medicare taxes, you are subject to SE tax if you receive $108. Free tax filing hr block 28 or more in wages from the church or organization. Free tax filing hr block For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. Free tax filing hr block Fishing crew member. Free tax filing hr block   If you are a member of the crew on a boat that catches fish or other water life, your earnings are subject to SE tax if all the following conditions apply. Free tax filing hr block You do not get any pay for the work except your share of the catch or a share of the proceeds from the sale of the catch, unless the pay meets all the following conditions. Free tax filing hr block The pay is not more than $100 per trip. Free tax filing hr block The pay is received only if there is a minimum catch. Free tax filing hr block The pay is solely for additional duties (such as mate, engineer, or cook) for which additional cash pay is traditional in the fishing industry. Free tax filing hr block You get a share of the catch or a share of the proceeds from the sale of the catch. Free tax filing hr block Your share depends on the amount of the catch. Free tax filing hr block The boat's operating crew normally numbers fewer than 10 individuals. Free tax filing hr block (An operating crew is considered as normally made up of fewer than 10 if the average size of the crew on trips made during the last four calendar quarters is fewer than 10. Free tax filing hr block ) Notary public. Free tax filing hr block   Fees you receive for services you perform as a notary public are reported on Schedule C or C-EZ but are not subject to self-employment tax (see the Instructions for Schedule SE (Form 1040)). Free tax filing hr block State or local government employee. Free tax filing hr block   You are subject to SE tax if you are an employee of a state or local government, are paid solely on a fee basis, and your services are not covered under a federal-state social security agreement. Free tax filing hr block Foreign government or international organization employee. Free tax filing hr block   You are subject to SE tax if both the following conditions are true. Free tax filing hr block You are a U. Free tax filing hr block S. Free tax filing hr block citizen employed in the United States, Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or the Virgin Islands by: A foreign government, A wholly-owned agency of a foreign government, or An international organization. Free tax filing hr block Your employer is not required to withhold social security and Medicare taxes from your wages. Free tax filing hr block U. Free tax filing hr block S. Free tax filing hr block citizen or resident alien residing abroad. Free tax filing hr block    If you are a self-employed U. Free tax filing hr block S. Free tax filing hr block citizen or resident alien living outside the United States, in most cases you must pay SE tax. Free tax filing hr block Do not reduce your foreign earnings from self-employment by your foreign earned income exclusion. Free tax filing hr block Exception. Free tax filing hr block    The United States has social security agreements with many countries to eliminate double taxation under two social security systems. Free tax filing hr block Under these agreements, you generally must only pay social security and Medicare taxes to the country in which you live. Free tax filing hr block The country to which you must pay the tax will issue a certificate which serves as proof of exemption from social security tax in the other country. Free tax filing hr block   For more information, see the Instructions for Schedule SE (Form 1040). Free tax filing hr block More Than One Business If you have earnings subject to SE tax from more than one trade, business, or profession, you must combine the net profit (or loss) from each to determine your total earnings subject to SE tax. Free tax filing hr block A loss from one business reduces your profit from another business. Free tax filing hr block Community Property Income If any of the income from a trade or business, other than a partnership, is community property income under state law, it is included in the earnings subject to SE tax of the spouse carrying on the trade or business. Free tax filing hr block Gain or Loss Do not include in earnings subject to SE tax a gain or loss from the disposition of property that is neither stock in trade nor held primarily for sale to customers. Free tax filing hr block It does not matter whether the disposition is a sale, exchange, or an involuntary conversion. Free tax filing hr block Lost Income Payments If you are self-employed and reduce or stop your business activities, any payment you receive from insurance or other sources for the lost business income is included in earnings subject to SE tax. Free tax filing hr block If you are not working when you receive the payment, it still relates to your business and is included in earnings subject to SE tax, even though your business is temporarily inactive. Free tax filing hr block Figuring Earnings Subject to SE Tax Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. Free tax filing hr block The regular method. Free tax filing hr block The nonfarm optional method. Free tax filing hr block The farm optional method. Free tax filing hr block You must use the regular method unless you are eligible to use one or both of the optional methods. Free tax filing hr block 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. Free tax filing hr block You want to receive credit for social security benefit coverage. Free tax filing hr block You incurred child or dependent care expenses for which you could claim a credit. Free tax filing hr block (An optional method may increase your earned income, which could increase your credit. Free tax filing hr block ) You are entitled to the earned income credit. Free tax filing hr block (An optional method may increase your earned income, which could increase your credit. Free tax filing hr block ) You are entitled to the additional child tax credit. Free tax filing hr block (An optional method may increase your earned income, which could increase your credit. Free tax filing hr block ) Effects of using an optional method. Free tax filing hr block   Using an optional method could increase your SE tax. Free tax filing hr block Paying more SE tax could result in your getting higher benefits when you retire. Free tax filing hr block   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 tax or no tax using the regular method. Free tax filing hr block   The optional methods may be used only to figure your SE tax. Free tax filing hr block To figure your income tax, include your actual earnings in gross income, regardless of which method you use to determine SE tax. Free tax filing hr block Regular Method Multiply your total earnings subject to SE tax by 92. Free tax filing hr block 35% (. Free tax filing hr block 9235) to get your net earnings under the regular method. Free tax filing hr block See Short Schedule SE, line 4, or Long Schedule SE, line 4a. Free tax filing hr block Net earnings figured using the regular method are also called actual net earnings. Free tax filing hr block Nonfarm Optional Method Use the nonfarm optional method only for earnings that do not come from farming. Free tax filing hr block You may use this method if you meet all the following tests. Free tax filing hr block You are self-employed on a regular basis. Free tax filing hr block This means that your actual net earnings from self-employment were $400 or more in at least 2 of the 3 tax years before the one for which you use this method. Free tax filing hr block The net earnings can be from either farm or nonfarm earnings or both. Free tax filing hr block You have used this method less than 5 years. Free tax filing hr block (There is a 5-year lifetime limit. Free tax filing hr block ) The years do not have to be one after another. Free tax filing hr block Your net nonfarm profits were: Less than $5,024, and Less than 72. Free tax filing hr block 189% of your gross nonfarm income. Free tax filing hr block Net nonfarm profits. Free tax filing hr block   Net nonfarm profit generally is the total of the amounts from: Line 31, Schedule C (Form 1040), Line 3, Schedule C-EZ (Form 1040), Box 14, code A, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J1, Schedule K-1 (Form 1065-B). Free tax filing hr block   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. Free tax filing hr block Gross nonfarm income. Free tax filing hr block   Your gross nonfarm income generally is the total of the amounts from: Line 7, Schedule C (Form 1040), Line 1, Schedule C-EZ (Form 1040), Box 14, code C, Schedule K-1 (Form 1065) (from nonfarm partnerships), and Box 9, code J2, Schedule K-1 (Form 1065-B). Free tax filing hr block Figuring Nonfarm Net Earnings If you meet the three tests explained earlier, use the following table to figure your net earnings from self-employment under the nonfarm optional method. Free tax filing hr block Table 10-1. Free tax filing hr block Figuring Nonfarm Net Earnings IF your gross nonfarm income is. Free tax filing hr block . Free tax filing hr block . Free tax filing hr block THEN your net earnings are equal to. Free tax filing hr block . Free tax filing hr block . Free tax filing hr block $6,960 or less Two-thirds of your gross nonfarm income. Free tax filing hr block More than $6,960 $4,640 Actual net earnings. Free tax filing hr block   Your actual net earnings are 92. Free tax filing hr block 35% of your total earnings subject to SE tax (that is, multiply total earnings subject to SE tax by 92. Free tax filing hr block 35% (. Free tax filing hr block 9235) to get actual net earnings). Free tax filing hr block Actual net earnings are equivalent to net earnings figured using the regular method. Free tax filing hr block Optional net earnings less than actual net earnings. Free tax filing hr block   You cannot use this method to report an amount less than your actual net earnings from self-employment. Free tax filing hr block Gross nonfarm income of $6,960 or less. Free tax filing hr block   The following examples illustrate how to figure net earnings when gross nonfarm income is $6,960 or less. Free tax filing hr block Example 1. Free tax filing hr block Net nonfarm profit less than $5,024 and less than 72. Free tax filing hr block 189% of gross nonfarm income. Free tax filing hr block Ann Green runs a craft business. Free tax filing hr block Her actual net earnings from self-employment were $800 in 2011 and $900 in 2012. Free tax filing hr block She meets the test for being self-employed on a regular basis. Free tax filing hr block She has used the nonfarm optional method less than 5 years. Free tax filing hr block Her gross income and net profit in 2013 are as follows: Gross nonfarm income $5,400 Net nonfarm profit $1,200 Ann's actual net earnings for 2013 are $1,108 ($1,200 × . Free tax filing hr block 9235). Free tax filing hr block Because her net profit is less than $5,024 and less than 72. Free tax filing hr block 189% of her gross income, she can use the nonfarm optional method to figure net earnings of $3,600 (2/3 × $5,400). Free tax filing hr block Because these net earnings are higher than her actual net earnings, she can report net earnings of $3,600 for 2013. Free tax filing hr block Example 2. Free tax filing hr block Net nonfarm profit less than $5,024 but not less than 72. Free tax filing hr block 189% of gross nonfarm income. Free tax filing hr block Assume that in Example 1 Ann's gross income is $1,000 and her net profit is $800. Free tax filing hr block She must use the regular method to figure her net earnings. Free tax filing hr block She cannot use the nonfarm optional method because her net profit is not less than 72. Free tax filing hr block 189% of her gross income. Free tax filing hr block Example 3. Free tax filing hr block Net loss from a nonfarm business. Free tax filing hr block Assume that in Example 1 Ann has a net loss of $700. Free tax filing hr block She can use the nonfarm optional method and report $3,600 (2/3 × $5,400) as her net earnings. Free tax filing hr block Example 4. Free tax filing hr block Nonfarm net earnings less than $400. Free tax filing hr block Assume that in Example 1 Ann has gross income of $525 and a net profit of $175. Free tax filing hr block In this situation, she would not pay any SE tax under either the regular method or the nonfarm optional method because her net earnings under both methods are less than $400. Free tax filing hr block Gross nonfarm income of more than $6,960. Free tax filing hr block   The following examples illustrate how to figure net earnings when gross nonfarm income is more than $6,960. Free tax filing hr block Example 1. Free tax filing hr block Net nonfarm profit less than $5,024 and less than 72. Free tax filing hr block 189% of gross nonfarm income. Free tax filing hr block John White runs an appliance repair shop. Free tax filing hr block His actual net earnings from self-employment were $10,500 in 2011 and $9,500 in 2012. Free tax filing hr block He meets the test for being self-employed on a regular basis. Free tax filing hr block He has used the nonfarm optional method less than 5 years. Free tax filing hr block His gross income and net profit in 2013 are as follows: Gross nonfarm income $12,000 Net nonfarm profit $1,200 John's actual net earnings for 2013 are $1,108 ($1,200 × . Free tax filing hr block 9235). Free tax filing hr block Because his net profit is less than $5,024 and less than 72. Free tax filing hr block 189% of his gross income, he can use the nonfarm optional method to figure net earnings of $4,640. Free tax filing hr block Because these net earnings are higher than his actual net earnings, he can report net earnings of $4,640 for 2013. Free tax filing hr block Example 2. Free tax filing hr block Net nonfarm profit not less than $5,024. Free tax filing hr block Assume that in Example 1 John's net profit is $5,400. Free tax filing hr block He must use the regular method. Free tax filing hr block He cannot use the nonfarm optional method because his net nonfarm profit is not less than $5,024. Free tax filing hr block Example 3. Free tax filing hr block Net loss from a nonfarm business. Free tax filing hr block Assume that in Example 1 John has a net loss of $700. Free tax filing hr block He can use the nonfarm optional method and report $4,640 as his net earnings from self-employment. Free tax filing hr block Farm Optional Method Use the farm optional method only for earnings from a farming business. Free tax filing hr block See Publication 225 for information about this method. Free tax filing hr block Using Both Optional Methods If you have both farm and nonfarm earnings, you may be able to use both optional methods to determine your net earnings from self-employment. Free tax filing hr block To figure your net earnings using both optional methods, you must: Figure your farm and nonfarm net earnings separately under each method. Free tax filing hr block Do not combine farm earnings with nonfarm earnings to figure your net earnings under either method. Free tax filing hr block Add the net earnings figured under each method to arrive at your total net earnings from self-employment. Free tax filing hr block You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. Free tax filing hr block If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. Free tax filing hr block Example. Free tax filing hr block You are a self-employed farmer. Free tax filing hr block You also operate a retail grocery store. Free tax filing hr block Your gross income, actual net earnings from self-employment, and optional farm and optional nonfarm net earnings from self-employment are shown in Table 10-2. Free tax filing hr block Table 10-2. Free tax filing hr block Example—Farm and Nonfarm Earnings Income and Earnings Farm Nonfarm Gross income $3,000 $6,000 Actual net earnings $900 $500 Optional net earnings (2/3 of gross income) $2,000 $4,000 Table 10-3 shows four methods or combinations of methods you can use to figure net earnings from self-employment using the farm and nonfarm gross income and actual net earnings shown in Table 10-2. Free tax filing hr block Method 1. Free tax filing hr block Using the regular method for both farm and nonfarm income. Free tax filing hr block Method 2. Free tax filing hr block Using the optional method for farm income and the regular method for nonfarm income. Free tax filing hr block Method 3. Free tax filing hr block Using the regular method for farm income and the optional method for nonfarm income. Free tax filing hr block Method 4. Free tax filing hr block Using the optional method for both farm and nonfarm income. Free tax filing hr block Note. Free tax filing hr block Actual net earnings is the same as net earnings figured using the regular method. Free tax filing hr block Table 10-3. Free tax filing hr block Example—Net Earnings Net Earnings 1 2 3 4 Actual  farm $ 900   $ 900   Optional  farm   $ 2,000   $ 2,000 Actual nonfarm $ 500 $ 500     Optional nonfarm     $4,000 $4,000 Amount you can report: $1,400 $2,500 $4,900 $4,640* *Limited to $4,640 because you used both optional methods. Free tax filing hr block Fiscal Year Filer If you use a tax year other than the calendar year, you must use the tax rate and maximum earnings limit in effect at the beginning of your tax year. Free tax filing hr block Even if the tax rate or maximum earnings limit changes during your tax year, continue to use the same rate and limit throughout your tax year. Free tax filing hr block Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. Free tax filing hr block Then enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. Free tax filing hr block Most taxpayers can use Section A—Short Schedule SE to figure their SE tax. Free tax filing hr block However, certain taxpayers must use Section B—Long Schedule SE. Free tax filing hr block 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. Free tax filing hr block Joint return. Free tax filing hr block   Even if you file a joint return, you cannot file a joint Schedule SE. Free tax filing hr block This is true whether one spouse or both spouses have earnings subject to SE tax. Free tax filing hr block If both of you have earnings subject to SE tax, each of you must complete a separate Schedule SE. Free tax filing hr block 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. Free tax filing hr block Attach both schedules to the joint return. Free tax filing hr block More than one business. Free tax filing hr block   If you have more than one trade or business, you must combine the net profit (or loss) from each business to figure your SE tax. Free tax filing hr block A loss from one business will reduce your profit from another business. Free tax filing hr block File one Schedule SE showing the earnings from self-employment, but file a separate Schedule C, C-EZ, or F for each business. Free tax filing hr block Example. Free tax filing hr block You are the sole proprietor of two separate businesses. Free tax filing hr block You operate a restaurant that made a net profit of $25,000. Free tax filing hr block You also have a cabinetmaking business that had a net loss of $500. Free tax filing hr block You must file a Schedule C for the restaurant showing your net profit of $25,000 and another Schedule C for the cabinetmaking business showing your net loss of $500. Free tax filing hr block You file Schedule SE showing total earnings subject to SE tax of $24,500. Free tax filing hr block Prev  Up  Next   Home   More Online Publications