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2010 Tax

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2010 Tax

2010 tax Index A Additional child tax credit, Additional child tax credit. 2010 tax Additional Medicare Tax, What's New, Useful Items - You may want to see:, Additional Medicare Tax. 2010 tax , Additional Medicare Tax. 2010 tax , Additional Medicare Tax. 2010 tax , Additional Medicare Tax. 2010 tax , Additional Medicare Tax. 2010 tax , Additional Medicare Tax Aliens Nonresident (see specific possession) Resident (see specific possession) American Samoa, American Samoa, Double Taxation Form 4563, Form 4563. 2010 tax Armed forces, U. 2010 tax S. 2010 tax Bona fide residence, Special rule for members of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax Armed Forces, U. 2010 tax S. 2010 tax Earned income credit, Earned income credit. 2010 tax , U. 2010 tax S. 2010 tax Armed Forces. 2010 tax Source of income, U. 2010 tax S. 2010 tax Armed Forces. 2010 tax Spouse, Special rule for civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax Assistance (see Tax help) Awards and prizes, Scholarships, Fellowships, Grants, Prizes, and Awards B Bankruptcy cases, Chapter 11, Chapter 11 Bankruptcy cases. 2010 tax Bona fide residence, Bona Fide Residence, Worldwide gross income. 2010 tax Closer connection, Closer Connection, Exception for Year of Move Year of move, Exception for Year of Move, Special Rules in the Year of a Move, Puerto Rico Presence test, Presence Test, Charitable sports event, Charitable Sports Event Child, defined, Days of presence in a possession. 2010 tax Nonresident aliens, Special rule for nonresident aliens. 2010 tax Possession, days in, Days of presence in a possession. 2010 tax Qualifying medical treatment, Qualifying Medical Treatment Significant connection, Significant Connection, Student, Student U. 2010 tax S. 2010 tax , days in, Days of presence in the United States. 2010 tax Reporting change in residency status, Reporting a Change in Bona Fide Residence, Worldwide gross income. 2010 tax Penalty for not reporting, Penalty for Not Filing Form 8898 Tax home, Tax Home, Year of Move Exceptions, Exceptions Government officials, Students and Government Officials Seafarers, Seafarers Students, Students and Government Officials Year of move, Year of Move, Special Rules in the Year of a Move, Puerto Rico Tests to meet, Bona Fide Residence U. 2010 tax S. 2010 tax Armed Forces, Special rule for members of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax Year of move, Special Rules in the Year of a Move, Puerto Rico Puerto Rico, Puerto Rico C Change in residency status, reporting, Reporting a Change in Bona Fide Residence, Worldwide gross income. 2010 tax Penalty for not reporting, Penalty for Not Filing Form 8898 Change of address, Reminders Charitable sports event, Charitable Sports Event Child tax credit, additional, Additional child tax credit. 2010 tax Child, defined, Days of presence in a possession. 2010 tax Closer connection, Closer Connection, Exception for Year of Move Year of move, Exception for Year of Move, Special Rules in the Year of a Move, Puerto Rico CNMI tax return, Nonresident Alien (Other Than a Bona Fide Resident of the CNMI) Commonwealth of Puerto Rico, The Commonwealth of Puerto Rico, Double Taxation Commonwealth of the Northern Mariana Islands (CNMI), The Commonwealth of the Northern Mariana Islands, Double Taxation Form 5074, Form 5074. 2010 tax Compensation for labor or personal services, Compensation for Labor or Personal Services, Pensions. 2010 tax Alternative basis, Alternative basis. 2010 tax Multi-year compensation, Multi-year compensation. 2010 tax Time basis, Time basis. 2010 tax Competent Authority Assistance, Competent Authority Assistance How to make your request, How to make your request. 2010 tax Credit or Refund File a claim for credit or refund of any overpayment sought, Credit or Refund Credits Earned income, Reminders, Earned income credit. 2010 tax Foreign tax, U. 2010 tax S. 2010 tax Government employees. 2010 tax , Moving expense deduction. 2010 tax , Foreign Tax Credit if Possession Income Is Excluded D Deductions IRA contribution, Individual retirement arrangement (IRA) deduction. 2010 tax Moving expenses U. 2010 tax S. 2010 tax return, Moving expense deduction. 2010 tax Personal exemptions, Personal Exemptions Self-employment tax, one-half of, Self-employment tax deduction. 2010 tax Standard deduction, Standard Deduction Deductions if Possession Income Is Excluded, Deductions if Possession Income Is Excluded Dispositions of certain property, special rules for, Special Rules for Gains From Dispositions of Certain Property Dividends, Dividends. 2010 tax Double taxation, inconsistent tax treatment Mutual agreement procedure, Double Taxation E Earned income credit, Reminders, Earned income credit. 2010 tax Effectively connected income, Effectively Connected Income Estimated tax payments, Estimated tax payments. 2010 tax , Estimated tax payments. 2010 tax , Estimated tax payments. 2010 tax , Estimated tax payments. 2010 tax , Estimated tax payments. 2010 tax , Estimated Tax Exemptions, deduction for, Personal Exemptions Extension of time to file U. 2010 tax S. 2010 tax return, Extension of Time To File USVI, Extension of time to file. 2010 tax F Filing requirements American Samoa, American Samoa, Double Taxation Form 4563, Form 4563. 2010 tax CNMI, The Commonwealth of the Northern Mariana Islands, Double Taxation Form 5074, Form 5074. 2010 tax Guam, Guam, Double Taxation Form 5074, Form 5074. 2010 tax Possessions, Filing Information for Individuals in Certain U. 2010 tax S. 2010 tax Possessions, Double Taxation Puerto Rico, The Commonwealth of Puerto Rico, Double Taxation U. 2010 tax S. 2010 tax return, Filing Requirement if Possession Income Is Excluded USVI, The U. 2010 tax S. 2010 tax Virgin Islands, Double Taxation Form 1040INFO, Form 1040INFO. 2010 tax Form 4868, Extension of time to file. 2010 tax Form 8689, Form 8689. 2010 tax Foreign tax credit, Foreign Tax Credit if Possession Income Is Excluded Form 1040-ES, Estimated Tax 1040-PR, Additional child tax credit. 2010 tax 1040-SS, Self-employment tax. 2010 tax , Additional child tax credit. 2010 tax , Self-employment tax. 2010 tax , Self-employment tax. 2010 tax , Self-employment tax. 2010 tax 1040INFO, Form 1040INFO. 2010 tax 1040NR, Nonresident alien. 2010 tax , Nonresident alien. 2010 tax , Nonresident Alien (Other Than a Bona Fide Resident of the CNMI), Nonresident Alien (Other Than a Bona Fide Resident of Guam), Nonresident Alien (Other Than a Bona Fide Resident of the USVI) 1116, U. 2010 tax S. 2010 tax Government employees. 2010 tax , Moving expense deduction. 2010 tax , Foreign Tax Credit if Possession Income Is Excluded 3903, Moving expense deduction. 2010 tax , Moving expense deduction. 2010 tax , Moving expense deduction. 2010 tax , Moving expense deduction. 2010 tax , Moving expense deduction. 2010 tax , Moving expense deduction. 2010 tax 4563, Form 4563. 2010 tax 4563, illustrated example, Illustrated Example of Form 4563, Line 15. 2010 tax , 4868, Extension of time to file. 2010 tax , Automatic 6-Month Extension 5074, Form 5074. 2010 tax , Moving expense deduction. 2010 tax , Form 5074. 2010 tax , Moving expense deduction. 2010 tax 5074, illustrated example, Illustrated Example of Form 5074, Part III. 2010 tax , 8689, Form 8689. 2010 tax 8689, illustrated example, Illustrated Example of Form 8689, Part IV. 2010 tax , 8822, Reminders 8898, Reporting a Change in Bona Fide Residence, Penalty for Not Filing Form 8898 Schedule A (Form 1040), Itemized Deductions Schedule SE (Form 1040), Self-Employment Tax Free tax services, Free help with your tax return. 2010 tax Fringe benefits, Certain fringe benefits sourced on a geographical basis. 2010 tax G Government employees, U. 2010 tax S. 2010 tax (see specific possession) Grants, Scholarships, Fellowships, Grants, Prizes, and Awards Guam, Guam, Double Taxation Form 5074, Form 5074. 2010 tax H Help (see Tax help) I Income Awards and prizes, Scholarships, Fellowships, Grants, Prizes, and Awards Effectively connected income, Effectively Connected Income Grants, Scholarships, Fellowships, Grants, Prizes, and Awards Investments, Investment Income, Royalties. 2010 tax Labor or personal services, Compensation for Labor or Personal Services, Pensions. 2010 tax Pensions, Pensions. 2010 tax Sales or other dispositions of property, Sales or Other Dispositions of Property, Special Rules for Gains From Dispositions of Certain Property Scholarships and fellowships, Scholarships, Fellowships, Grants, Prizes, and Awards Services performed partly within a possession, Services performed partly inside and partly outside a relevant possession. 2010 tax , Alternative basis. 2010 tax Source of, Possession Source Income U. 2010 tax S. 2010 tax Armed Forces, U. 2010 tax S. 2010 tax Armed Forces. 2010 tax U. 2010 tax S. 2010 tax income rule, U. 2010 tax S. 2010 tax income rule. 2010 tax Income from American Samoa or Puerto Rico excluded. 2010 tax , Income from American Samoa or Puerto Rico excluded. 2010 tax Deductions if income from American Samoa or Puerto Rico excluded, Deductions if Possession Income Is Excluded Interest income, Interest income. 2010 tax Inventory Sales or other dispositions of, Inventory. 2010 tax Investment income, Investment Income, Royalties. 2010 tax IRA deduction, Individual retirement arrangement (IRA) deduction. 2010 tax Itemized deductions, Itemized Deductions M Medical treatment, qualifying, Qualifying Medical Treatment Moving expense deduction U. 2010 tax S. 2010 tax return, Moving expense deduction. 2010 tax N Net Investment Income Tax, What's New, Useful Items - You may want to see:, Net Investment Income Tax. 2010 tax , Net Investment Income Tax. 2010 tax , Net Investment Income Tax Nonresident alien (see specific possession) Northern Mariana Islands (CNMI), The Commonwealth of the Northern Mariana Islands, Double Taxation P Paying your taxes, Paying Your Taxes Penalty Failure to report change in residency status, Penalty for Not Filing Form 8898 Pension income, Pensions. 2010 tax Permanent home, Permanent home. 2010 tax Personal exemptions, deduction for, Personal Exemptions Personal property Sales or other dispositions of, Personal property. 2010 tax Personal service income, Compensation for Labor or Personal Services, Pensions. 2010 tax Possession source income, Possession Source Income, Effectively Connected Income Awards and prizes, Scholarships, Fellowships, Grants, Prizes, and Awards Effectively connected income, Effectively Connected Income Grants, Scholarships, Fellowships, Grants, Prizes, and Awards Investment income, Investment Income, Royalties. 2010 tax Labor or personal services, Compensation for Labor or Personal Services, Pensions. 2010 tax Pensions, Pensions. 2010 tax Sales or other dispositions of property, Sales or Other Dispositions of Property, Special Rules for Gains From Dispositions of Certain Property Scholarships and fellowships, Scholarships, Fellowships, Grants, Prizes, and Awards Services performed partly within a possession, Services performed partly inside and partly outside a relevant possession. 2010 tax , Alternative basis. 2010 tax U. 2010 tax S. 2010 tax Armed Forces, U. 2010 tax S. 2010 tax Armed Forces. 2010 tax U. 2010 tax S. 2010 tax income rule, U. 2010 tax S. 2010 tax income rule. 2010 tax Possessions, list of, Introduction Presence test, Presence Test, Charitable sports event, Charitable Sports Event Child, defined, Days of presence in a possession. 2010 tax Nonresident aliens, Special rule for nonresident aliens. 2010 tax Possession, days in, Days of presence in a possession. 2010 tax Qualifying medical treatment, Qualifying Medical Treatment Significant connection, Significant Connection, Permanent home, Permanent home. 2010 tax Student, Student U. 2010 tax S. 2010 tax , days in, Days of presence in the United States. 2010 tax Prizes, Scholarships, Fellowships, Grants, Prizes, and Awards Publications (see Tax help) Puerto Rico, The Commonwealth of Puerto Rico, Double Taxation Additional child tax credit, Additional child tax credit. 2010 tax Bona fide residence Year of move, Puerto Rico Q Qualifying medical treatment, Qualifying Medical Treatment R Real property Sales or other dispositions of, Real property. 2010 tax Reminders Earned income credit (EIC). 2010 tax , Reminders Electronic filing. 2010 tax , Reminders Rental income, Rental income. 2010 tax Resident alien (see specific possession) Royalty income, Royalties. 2010 tax S Scholarships and fellowships, Scholarships, Fellowships, Grants, Prizes, and Awards Self-employment tax U. 2010 tax S. 2010 tax return, Self-Employment Tax Self-employment tax deduction, Self-employment tax deduction. 2010 tax Services performed partly within a possession, Services performed partly inside and partly outside a relevant possession. 2010 tax , Alternative basis. 2010 tax Significant connection, Significant Connection, Source of income, Possession Source Income, Effectively Connected Income Awards and prizes, Scholarships, Fellowships, Grants, Prizes, and Awards Effectively connected income, Effectively Connected Income Grants, Scholarships, Fellowships, Grants, Prizes, and Awards Investment income, Investment Income, Royalties. 2010 tax Labor or personal services, Compensation for Labor or Personal Services, Pensions. 2010 tax Pensions, Pensions. 2010 tax Sales or other dispositions of property, Sales or Other Dispositions of Property, Special Rules for Gains From Dispositions of Certain Property Scholarships and fellowships, Scholarships, Fellowships, Grants, Prizes, and Awards Services performed partly within a possession, Services performed partly inside and partly outside a relevant possession. 2010 tax , Alternative basis. 2010 tax U. 2010 tax S. 2010 tax Armed Forces, U. 2010 tax S. 2010 tax Armed Forces. 2010 tax U. 2010 tax S. 2010 tax income rule, U. 2010 tax S. 2010 tax income rule. 2010 tax Special rules for filing (see specific possession) Special rules for gains from dispositions of certain property, Special Rules for Gains From Dispositions of Certain Property Sports event, charitable, Charitable Sports Event Standard deduction, Standard Deduction Statement of Specified Foreign Financial Assets, Form 8938,, Reminders Student, Student T Tables U. 2010 tax S. 2010 tax filing requirements for most taxpayers (Table 4-1), U. 2010 tax S. 2010 tax source of income (Table 2-1), Table 2-1. 2010 tax General Rules for Determining U. 2010 tax S. 2010 tax Source of Income Tax help, How To Get Tax Help Tax home, Tax Home, Year of Move Exceptions, Exceptions Government officials, Students and Government Officials Seafarers, Seafarers Students, Students and Government Officials Year of move, Year of Move, Special Rules in the Year of a Move, Puerto Rico Taxpayer Clinics, Low Income Taxpayer Clinics, Low Income Taxpayer Clinics (LITCs). 2010 tax TTY/TDD information, How To Get Tax Help U U. 2010 tax S. 2010 tax Armed Forces Bona fide residence, Special rule for members of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax Earned income credit, Earned income credit. 2010 tax , U. 2010 tax S. 2010 tax Armed Forces. 2010 tax Source of income, U. 2010 tax S. 2010 tax Armed Forces. 2010 tax Spouse, Special rule for civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax , Civilian spouse of active duty member of the U. 2010 tax S. 2010 tax Armed Forces. 2010 tax U. 2010 tax S. 2010 tax Government employees (see specific possession) U. 2010 tax S. 2010 tax income rule, U. 2010 tax S. 2010 tax income rule. 2010 tax U. 2010 tax S. 2010 tax return with excluded income, Deductions if Possession Income Is Excluded U. 2010 tax S. 2010 tax return, possession income excluded on, Special Rules for Completing Your U. 2010 tax S. 2010 tax Tax Return, Foreign Tax Credit if Possession Income Is Excluded Credits Earned income credit, Earned income credit. 2010 tax Foreign tax credit, Foreign Tax Credit if Possession Income Is Excluded Deductions IRA contribution, Individual retirement arrangement (IRA) deduction. 2010 tax Itemized deductions, Itemized Deductions Moving expenses, Moving expense deduction. 2010 tax Personal exemptions, Personal Exemptions Self-employment tax, one-half of, Self-employment tax deduction. 2010 tax Standard deduction, Standard Deduction U. 2010 tax S. 2010 tax taxation of possession income, to get information on, Introduction U. 2010 tax S. 2010 tax Virgin Islands (USVI), The U. 2010 tax S. 2010 tax Virgin Islands, Double Taxation Form 1040INFO, Form 1040INFO. 2010 tax Form 4868, Extension of time to file. 2010 tax Form 8689, Form 8689. 2010 tax V Virgin Islands, U. 2010 tax S. 2010 tax , The U. 2010 tax S. 2010 tax Virgin Islands, Double Taxation W When to file U. 2010 tax S. 2010 tax return, When To File, Extension beyond 2 months. 2010 tax Where To File U. 2010 tax S. 2010 tax return, Where To File Which return to file (see specific possession) Who must file U. 2010 tax S. 2010 tax return, Filing Requirement if Possession Income Is Excluded Prev  Up     Home   More Online Publications
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The 2010 Tax

2010 tax 10. 2010 tax   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. 2010 tax 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. 2010 tax Use Schedule SE to figure net earnings from self-employment. 2010 tax Sole proprietor or independent contractor. 2010 tax   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. 2010 tax SE tax rate. 2010 tax    For 2013, the SE tax rate on net earnings is 15. 2010 tax 3% (12. 2010 tax 4% social security tax plus 2. 2010 tax 9% Medicare tax). 2010 tax Maximum earnings subject to self-employment tax. 2010 tax    Only the first $113,700 of your combined wages, tips, and net earnings in 2013 is subject to any combination of the 12. 2010 tax 4% social security part of SE tax, social security tax, or railroad retirement (tier 1) tax. 2010 tax   All of your combined wages, tips, and net earnings in 2013 are subject to any combination of the 2. 2010 tax 9% Medicare part of SE tax, social security tax, or railroad retirement (tier 1) tax. 2010 tax   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. 2010 tax 4% social security part of the SE tax on any of your net earnings. 2010 tax However, you must pay the 2. 2010 tax 9% Medicare part of the SE tax on all your net earnings. 2010 tax Special Rules and Exceptions Aliens. 2010 tax   Generally, resident aliens must pay self-employment tax under the same rules that apply to U. 2010 tax S. 2010 tax citizens. 2010 tax Nonresident aliens are not subject to SE tax unless an international social security agreement in effect determines that they are covered under the U. 2010 tax S. 2010 tax social security system. 2010 tax 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. 2010 tax S. 2010 tax residents for self-employment tax purposes. 2010 tax For more information on aliens, see Publication 519, U. 2010 tax S. 2010 tax Tax Guide for Aliens. 2010 tax Child employed by parent. 2010 tax   You are not subject to SE tax if you are under age 18 and you are working for your father or mother. 2010 tax Church employee. 2010 tax    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. 2010 tax 28 or more in wages from the church or organization. 2010 tax For more information, see Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers. 2010 tax Fishing crew member. 2010 tax   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. 2010 tax 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. 2010 tax The pay is not more than $100 per trip. 2010 tax The pay is received only if there is a minimum catch. 2010 tax The pay is solely for additional duties (such as mate, engineer, or cook) for which additional cash pay is traditional in the fishing industry. 2010 tax You get a share of the catch or a share of the proceeds from the sale of the catch. 2010 tax Your share depends on the amount of the catch. 2010 tax The boat's operating crew normally numbers fewer than 10 individuals. 2010 tax (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. 2010 tax ) Notary public. 2010 tax   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)). 2010 tax State or local government employee. 2010 tax   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. 2010 tax Foreign government or international organization employee. 2010 tax   You are subject to SE tax if both the following conditions are true. 2010 tax You are a U. 2010 tax S. 2010 tax 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. 2010 tax Your employer is not required to withhold social security and Medicare taxes from your wages. 2010 tax U. 2010 tax S. 2010 tax citizen or resident alien residing abroad. 2010 tax    If you are a self-employed U. 2010 tax S. 2010 tax citizen or resident alien living outside the United States, in most cases you must pay SE tax. 2010 tax Do not reduce your foreign earnings from self-employment by your foreign earned income exclusion. 2010 tax Exception. 2010 tax    The United States has social security agreements with many countries to eliminate double taxation under two social security systems. 2010 tax Under these agreements, you generally must only pay social security and Medicare taxes to the country in which you live. 2010 tax 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. 2010 tax   For more information, see the Instructions for Schedule SE (Form 1040). 2010 tax 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. 2010 tax A loss from one business reduces your profit from another business. 2010 tax 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. 2010 tax 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. 2010 tax It does not matter whether the disposition is a sale, exchange, or an involuntary conversion. 2010 tax 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. 2010 tax 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. 2010 tax Figuring Earnings Subject to SE Tax Methods for Figuring Net Earnings There are three ways to figure your net earnings from self-employment. 2010 tax The regular method. 2010 tax The nonfarm optional method. 2010 tax The farm optional method. 2010 tax You must use the regular method unless you are eligible to use one or both of the optional methods. 2010 tax 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. 2010 tax You want to receive credit for social security benefit coverage. 2010 tax You incurred child or dependent care expenses for which you could claim a credit. 2010 tax (An optional method may increase your earned income, which could increase your credit. 2010 tax ) You are entitled to the earned income credit. 2010 tax (An optional method may increase your earned income, which could increase your credit. 2010 tax ) You are entitled to the additional child tax credit. 2010 tax (An optional method may increase your earned income, which could increase your credit. 2010 tax ) Effects of using an optional method. 2010 tax   Using an optional method could increase your SE tax. 2010 tax Paying more SE tax could result in your getting higher benefits when you retire. 2010 tax   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. 2010 tax   The optional methods may be used only to figure your SE tax. 2010 tax To figure your income tax, include your actual earnings in gross income, regardless of which method you use to determine SE tax. 2010 tax Regular Method Multiply your total earnings subject to SE tax by 92. 2010 tax 35% (. 2010 tax 9235) to get your net earnings under the regular method. 2010 tax See Short Schedule SE, line 4, or Long Schedule SE, line 4a. 2010 tax Net earnings figured using the regular method are also called actual net earnings. 2010 tax Nonfarm Optional Method Use the nonfarm optional method only for earnings that do not come from farming. 2010 tax You may use this method if you meet all the following tests. 2010 tax You are self-employed on a regular basis. 2010 tax 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. 2010 tax The net earnings can be from either farm or nonfarm earnings or both. 2010 tax You have used this method less than 5 years. 2010 tax (There is a 5-year lifetime limit. 2010 tax ) The years do not have to be one after another. 2010 tax Your net nonfarm profits were: Less than $5,024, and Less than 72. 2010 tax 189% of your gross nonfarm income. 2010 tax Net nonfarm profits. 2010 tax   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). 2010 tax   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. 2010 tax Gross nonfarm income. 2010 tax   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). 2010 tax 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. 2010 tax Table 10-1. 2010 tax Figuring Nonfarm Net Earnings IF your gross nonfarm income is. 2010 tax . 2010 tax . 2010 tax THEN your net earnings are equal to. 2010 tax . 2010 tax . 2010 tax $6,960 or less Two-thirds of your gross nonfarm income. 2010 tax More than $6,960 $4,640 Actual net earnings. 2010 tax   Your actual net earnings are 92. 2010 tax 35% of your total earnings subject to SE tax (that is, multiply total earnings subject to SE tax by 92. 2010 tax 35% (. 2010 tax 9235) to get actual net earnings). 2010 tax Actual net earnings are equivalent to net earnings figured using the regular method. 2010 tax Optional net earnings less than actual net earnings. 2010 tax   You cannot use this method to report an amount less than your actual net earnings from self-employment. 2010 tax Gross nonfarm income of $6,960 or less. 2010 tax   The following examples illustrate how to figure net earnings when gross nonfarm income is $6,960 or less. 2010 tax Example 1. 2010 tax Net nonfarm profit less than $5,024 and less than 72. 2010 tax 189% of gross nonfarm income. 2010 tax Ann Green runs a craft business. 2010 tax Her actual net earnings from self-employment were $800 in 2011 and $900 in 2012. 2010 tax She meets the test for being self-employed on a regular basis. 2010 tax She has used the nonfarm optional method less than 5 years. 2010 tax 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 × . 2010 tax 9235). 2010 tax Because her net profit is less than $5,024 and less than 72. 2010 tax 189% of her gross income, she can use the nonfarm optional method to figure net earnings of $3,600 (2/3 × $5,400). 2010 tax Because these net earnings are higher than her actual net earnings, she can report net earnings of $3,600 for 2013. 2010 tax Example 2. 2010 tax Net nonfarm profit less than $5,024 but not less than 72. 2010 tax 189% of gross nonfarm income. 2010 tax Assume that in Example 1 Ann's gross income is $1,000 and her net profit is $800. 2010 tax She must use the regular method to figure her net earnings. 2010 tax She cannot use the nonfarm optional method because her net profit is not less than 72. 2010 tax 189% of her gross income. 2010 tax Example 3. 2010 tax Net loss from a nonfarm business. 2010 tax Assume that in Example 1 Ann has a net loss of $700. 2010 tax She can use the nonfarm optional method and report $3,600 (2/3 × $5,400) as her net earnings. 2010 tax Example 4. 2010 tax Nonfarm net earnings less than $400. 2010 tax Assume that in Example 1 Ann has gross income of $525 and a net profit of $175. 2010 tax 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. 2010 tax Gross nonfarm income of more than $6,960. 2010 tax   The following examples illustrate how to figure net earnings when gross nonfarm income is more than $6,960. 2010 tax Example 1. 2010 tax Net nonfarm profit less than $5,024 and less than 72. 2010 tax 189% of gross nonfarm income. 2010 tax John White runs an appliance repair shop. 2010 tax His actual net earnings from self-employment were $10,500 in 2011 and $9,500 in 2012. 2010 tax He meets the test for being self-employed on a regular basis. 2010 tax He has used the nonfarm optional method less than 5 years. 2010 tax 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 × . 2010 tax 9235). 2010 tax Because his net profit is less than $5,024 and less than 72. 2010 tax 189% of his gross income, he can use the nonfarm optional method to figure net earnings of $4,640. 2010 tax Because these net earnings are higher than his actual net earnings, he can report net earnings of $4,640 for 2013. 2010 tax Example 2. 2010 tax Net nonfarm profit not less than $5,024. 2010 tax Assume that in Example 1 John's net profit is $5,400. 2010 tax He must use the regular method. 2010 tax He cannot use the nonfarm optional method because his net nonfarm profit is not less than $5,024. 2010 tax Example 3. 2010 tax Net loss from a nonfarm business. 2010 tax Assume that in Example 1 John has a net loss of $700. 2010 tax He can use the nonfarm optional method and report $4,640 as his net earnings from self-employment. 2010 tax Farm Optional Method Use the farm optional method only for earnings from a farming business. 2010 tax See Publication 225 for information about this method. 2010 tax 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. 2010 tax To figure your net earnings using both optional methods, you must: Figure your farm and nonfarm net earnings separately under each method. 2010 tax Do not combine farm earnings with nonfarm earnings to figure your net earnings under either method. 2010 tax Add the net earnings figured under each method to arrive at your total net earnings from self-employment. 2010 tax You can report less than your total actual farm and nonfarm net earnings but not less than actual nonfarm net earnings. 2010 tax If you use both optional methods, you can report no more than $4,640 as your combined net earnings from self-employment. 2010 tax Example. 2010 tax You are a self-employed farmer. 2010 tax You also operate a retail grocery store. 2010 tax 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. 2010 tax Table 10-2. 2010 tax 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. 2010 tax Method 1. 2010 tax Using the regular method for both farm and nonfarm income. 2010 tax Method 2. 2010 tax Using the optional method for farm income and the regular method for nonfarm income. 2010 tax Method 3. 2010 tax Using the regular method for farm income and the optional method for nonfarm income. 2010 tax Method 4. 2010 tax Using the optional method for both farm and nonfarm income. 2010 tax Note. 2010 tax Actual net earnings is the same as net earnings figured using the regular method. 2010 tax Table 10-3. 2010 tax 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. 2010 tax 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. 2010 tax 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. 2010 tax Reporting Self-Employment Tax Use Schedule SE (Form 1040) to figure and report your SE tax. 2010 tax Then enter the SE tax on line 56 of Form 1040 and attach Schedule SE to Form 1040. 2010 tax Most taxpayers can use Section A—Short Schedule SE to figure their SE tax. 2010 tax However, certain taxpayers must use Section B—Long Schedule SE. 2010 tax 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. 2010 tax Joint return. 2010 tax   Even if you file a joint return, you cannot file a joint Schedule SE. 2010 tax This is true whether one spouse or both spouses have earnings subject to SE tax. 2010 tax If both of you have earnings subject to SE tax, each of you must complete a separate Schedule SE. 2010 tax 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. 2010 tax Attach both schedules to the joint return. 2010 tax More than one business. 2010 tax   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. 2010 tax A loss from one business will reduce your profit from another business. 2010 tax File one Schedule SE showing the earnings from self-employment, but file a separate Schedule C, C-EZ, or F for each business. 2010 tax Example. 2010 tax You are the sole proprietor of two separate businesses. 2010 tax You operate a restaurant that made a net profit of $25,000. 2010 tax You also have a cabinetmaking business that had a net loss of $500. 2010 tax 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. 2010 tax You file Schedule SE showing total earnings subject to SE tax of $24,500. 2010 tax Prev  Up  Next   Home   More Online Publications