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File 2012 Taxes Late Online

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File 2012 Taxes Late Online

File 2012 taxes late online Publication 463 - Introductory Material Table of Contents Future Developments What's New Reminder IntroductionUsers of employer-provided vehicles. File 2012 taxes late online Volunteers. File 2012 taxes late online Ordering forms and publications. File 2012 taxes late online Tax questions. File 2012 taxes late online Useful Items - You may want to see: Future Developments For the latest information about developments related to Publication 463, such as legislation enacted after it was published, go to www. File 2012 taxes late online irs. File 2012 taxes late online gov/pub463. File 2012 taxes late online What's New Standard mileage rate. File 2012 taxes late online  For 2013, the standard mileage rate for the cost of operating your car for business use is 56½ cents per mile. File 2012 taxes late online Car expenses and use of the standard mileage rate are explained in chapter 4. File 2012 taxes late online Depreciation limits on cars, trucks, and vans. File 2012 taxes late online  For 2013, the first-year limit on the total depreciation deduction for cars remains at $11,160 ($3,160 if you elect not to claim the special depreciation allowance). File 2012 taxes late online For trucks and vans the first-year limit remains at $11,360 ($3,360 if you elect not to claim the special depreciation allowance). File 2012 taxes late online Depreciation limits are explained in chapter 4. File 2012 taxes late online Section 179 deduction. File 2012 taxes late online  For 2013, the section 179 deduction limit on qualifying property purchases (including cars, trucks, and vans) is a total of $500,000 and the limit on those purchases at which the deduction begins to be phased out is $2,000,000. File 2012 taxes late online Section 179 Deduction is explained in chapter 4. File 2012 taxes late online Special depreciation allowance. File 2012 taxes late online  For 2013, the special (“bonus”) depreciation allowance on qualified property (including cars, trucks, and vans) remains at 50%. File 2012 taxes late online Special Depreciation Allowance is explained in chapter 4. File 2012 taxes late online Reminder Photographs of missing children. File 2012 taxes late online  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. File 2012 taxes late online Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. File 2012 taxes late online 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. File 2012 taxes late online Per diem rates. File 2012 taxes late online  The IRS no longer updates Publication 1542, Per Diem Rates (For Travel Within the Continental United States). File 2012 taxes late online Instead, current per diem rates may be found on the U. File 2012 taxes late online S. File 2012 taxes late online General Services Administration (GSA) website at www. File 2012 taxes late online gsa. File 2012 taxes late online gov/perdiem. File 2012 taxes late online Introduction You may be able to deduct the ordinary and necessary business-related expenses you have for: Travel, Entertainment, Gifts, or Transportation. File 2012 taxes late online An ordinary expense is one that is common and accepted in your trade or business. File 2012 taxes late online A necessary expense is one that is helpful and appropriate for your business. File 2012 taxes late online An expense does not have to be required to be considered necessary. File 2012 taxes late online This publication explains: What expenses are deductible, How to report them on your return, What records you need to prove your expenses, and How to treat any expense reimbursements you may receive. File 2012 taxes late online Who should use this publication. File 2012 taxes late online   You should read this publication if you are an employee or a sole proprietor who has business-related travel, entertainment, gift, or transportation expenses. File 2012 taxes late online Users of employer-provided vehicles. File 2012 taxes late online   If an employer-provided vehicle was available for your use, you received a fringe benefit. File 2012 taxes late online Generally, your employer must include the value of the use or availability of the vehicle in your income. File 2012 taxes late online However, there are exceptions if the use of the vehicle qualifies as a working condition fringe benefit (such as the use of a qualified nonpersonal use vehicle). File 2012 taxes late online   A working condition fringe benefit is any property or service provided to you by your employer for which you could deduct the cost as an employee business expense if you had paid for it. File 2012 taxes late online   A qualified nonpersonal use vehicle is one that is not likely to be used more than minimally for personal purposes because of its design. File 2012 taxes late online See Qualified nonpersonal use vehicles under Actual Car Expenses in chapter 4. File 2012 taxes late online   For information on how to report your car expenses that your employer did not provide or reimburse you for (such as when you pay for gas and maintenance for a car your employer provides), see Vehicle Provided by Your Employer in chapter 6. File 2012 taxes late online Who does not need to use this publication. File 2012 taxes late online   Partnerships, corporations, trusts, and employers who reimburse their employees for business expenses should refer to their tax form instructions and chapter 11 of Publication 535, Business Expenses, for information on deducting travel, meals, and entertainment expenses. File 2012 taxes late online   If you are an employee, you will not need to read this publication if all of the following are true. File 2012 taxes late online You fully accounted to your employer for your work-related expenses. File 2012 taxes late online You received full reimbursement for your expenses. File 2012 taxes late online Your employer required you to return any excess reimbursement and you did so. File 2012 taxes late online There is no amount shown with a code “L” in box 12 of your Form W-2, Wage and Tax Statement. File 2012 taxes late online If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. File 2012 taxes late online If you would like more information on reimbursements and accounting to your employer, see chapter 6 . File 2012 taxes late online    If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2. File 2012 taxes late online Volunteers. File 2012 taxes late online   If you perform services as a volunteer worker for a qualified charity, you may be able to deduct some of your costs as a charitable contribution. File 2012 taxes late online See Out-of-Pocket Expenses in Giving Services in Publication 526, Charitable Contributions, for information on the expenses you can deduct. File 2012 taxes late online Comments and suggestions. File 2012 taxes late online   We welcome your comments about this publication and your suggestions for future editions. File 2012 taxes late online   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. File 2012 taxes late online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. File 2012 taxes late online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File 2012 taxes late online   You can send your comments from www. File 2012 taxes late online irs. File 2012 taxes late online gov/formspubs/. File 2012 taxes late online Click on “More Information” and then on “Comment on Tax Forms and Publications. File 2012 taxes late online ”   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. File 2012 taxes late online Ordering forms and publications. File 2012 taxes late online   Visit www. File 2012 taxes late online irs. File 2012 taxes late online 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. File 2012 taxes late online Internal Revenue Service 1201 N. File 2012 taxes late online Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. File 2012 taxes late online   If you have a tax question, check the information available on IRS. File 2012 taxes late online gov or call 1-800-829-1040. File 2012 taxes late online We cannot answer tax questions sent to either of the above addresses. File 2012 taxes late online Useful Items - You may want to see: Publication 225 Farmer's Tax Guide 529 Miscellaneous Deductions 535 Business Expenses 946 How To Depreciate Property Form (and Instructions) Schedule A (Form 1040) Itemized Deductions Schedule C (Form 1040) Profit or Loss From Business Schedule C-EZ (Form 1040) Net Profit From Business Schedule F (Form 1040) Profit or Loss From Farming 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 4562 Depreciation and Amortization See chapter 7, How To Get Tax Help , for information about getting these publications and forms. File 2012 taxes late online Prev  Up  Next   Home   More Online Publications
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LT 18 (Letter 1615) Frequently Asked Questions (FAQs)

What is the notice telling me?

We do not have a record of receiving federal income tax returns for the years indicated in the letter.

What do I have to do?

File the returns or contact us to discuss the matter. If you are a wage earner, we usually can provide you with your income and withholding information if you do not have the necessary records to complete your returns. In addition, as allowed under Internal Revenue Code Section 6020B, we will prepare your employment, excise, or partnership returns based on available information such as the last returns you filed. We will figure your tax and send you a bill for that tax, plus interest and penalty charges. This won't be to your advantage.

How much time do I have?

Contact us as soon as possible, but no later than 10 days after the date on the letter.

What happens if I don't file?

We may file the return for you. As allowed under Internal Revenue Code Section 6020B, we will prepare your employment, excise, or partnership returns based on available information such as the last returns you filed. We will figure your tax and send you a bill for that tax, plus interest and penalty charges. This won't be to your advantage.

Who should I contact?

Contact us at the phone number shown in the letter; the person answering will be able to assist you.

What if I don't agree or have already taken corrective action?

If you do not agree with this notice, call us immediately at the number printed at the top of the notice. We will do our best to help you. If you called us about this matter before, but we did not correct the problem, you may want to contact the Office of the Taxpayer Advocate.

If you have already filed the requested return(s), you should still call us at the number printed at the top of the notice to make sure your account reflects this. We may ask you to resubmit the return with an original signature.

Page Last Reviewed or Updated: 30-Jan-2014

The File 2012 Taxes Late Online

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