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H And R Block Tax Software

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H And R Block Tax Software

H and r block tax software 6. H and r block tax software   How To Get Tax Help Table of Contents Low Income Taxpayer Clinics (LITCs). H and r block tax software Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. H and r block tax software Free help with your tax return. H and r block tax software   You can get free help preparing your return nationwide from IRS-certified volunteers. H and r block tax software The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. H and r block tax software The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. H and r block tax software Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. H and r block tax software In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. H and r block tax software To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. H and r block tax software gov, download the IRS2Go app, or call 1-800-906-9887. H and r block tax software   As part of the TCE program, AARP offers the Tax-Aide counseling program. H and r block tax software To find the nearest AARP Tax-Aide site, visit AARP's website at www. H and r block tax software aarp. H and r block tax software org/money/taxaide or call 1-888-227-7669. H and r block tax software For more information on these programs, go to IRS. H and r block tax software gov and enter “VITA” in the search box. H and r block tax software Internet. H and r block tax software    IRS. H and r block tax software gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. H and r block tax software Download the free IRS2Go app from the iTunes app store or from Google Play. H and r block tax software Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. H and r block tax software Check the status of your 2013 refund with the Where's My Refund? application on IRS. H and r block tax software gov or download the IRS2Go app and select the Refund Status option. H and r block tax software The IRS issues more than 9 out of 10 refunds in less than 21 days. H and r block tax software Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. H and r block tax software You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. H and r block tax software The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. H and r block tax software Use the Interactive Tax Assistant (ITA) to research your tax questions. H and r block tax software No need to wait on the phone or stand in line. H and r block tax software The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. H and r block tax software When you reach the response screen, you can print the entire interview and the final response for your records. H and r block tax software New subject areas are added on a regular basis. H and r block tax software  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. H and r block tax software gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. H and r block tax software You can use the IRS Tax Map, to search publications and instructions by topic or keyword. H and r block tax software The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. H and r block tax software When the user searches the IRS Tax Map, they will be provided with links to related content in existing IRS publications, forms and instructions, questions and answers, and Tax Topics. H and r block tax software Coming this filing season, you can immediately view and print for free all 5 types of individual federal tax transcripts (tax returns, tax account, record of account, wage and income statement, and certification of non-filing) using Get Transcript. H and r block tax software You can also ask the IRS to mail a return or an account transcript to you. H and r block tax software Only the mail option is available by choosing the Tax Records option on the IRS2Go app by selecting Mail Transcript on IRS. H and r block tax software gov or by calling 1-800-908-9946. H and r block tax software Tax return and tax account transcripts are generally available for the current year and the past three years. H and r block tax software Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. H and r block tax software Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. H and r block tax software If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. H and r block tax software Check the status of your amended return using Where's My Amended Return? Go to IRS. H and r block tax software gov and enter Where's My Amended Return? in the search box. H and r block tax software You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. H and r block tax software It can take up to 3 weeks from the date you mailed it to show up in our system. H and r block tax software Make a payment using one of several safe and convenient electronic payment options available on IRS. H and r block tax software gov. H and r block tax software Select the Payment tab on the front page of IRS. H and r block tax software gov for more information. H and r block tax software Determine if you are eligible and apply for an online payment agreement, if you owe more tax than you can pay today. H and r block tax software Figure your income tax withholding with the IRS Withholding Calculator on IRS. H and r block tax software gov. H and r block tax software Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. H and r block tax software Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. H and r block tax software gov. H and r block tax software Request an Electronic Filing PIN by going to IRS. H and r block tax software gov and entering Electronic Filing PIN in the search box. H and r block tax software Download forms, instructions and publications, including accessible versions for people with disabilities. H and r block tax software Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. H and r block tax software gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. H and r block tax software An employee can answer questions about your tax account or help you set up a payment plan. H and r block tax software Before you visit, check the Office Locator on IRS. H and r block tax software gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. H and r block tax software If you have a special need, such as a disability, you can request an appointment. H and r block tax software Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. H and r block tax software Apply for an Employer Identification Number (EIN). H and r block tax software Go to IRS. H and r block tax software gov and enter Apply for an EIN in the search box. H and r block tax software Read the Internal Revenue Code, regulations, or other official guidance. H and r block tax software Read Internal Revenue Bulletins. H and r block tax software Sign up to receive local and national tax news and more by email. H and r block tax software Just click on “subscriptions” above the search box on IRS. H and r block tax software gov and choose from a variety of options. H and r block tax software    Phone. H and r block tax software You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. H and r block tax software Download the free IRS2Go app from the iTunes app store or from Google Play. H and r block tax software Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. H and r block tax software gov, or download the IRS2Go app. H and r block tax software Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. H and r block tax software The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. H and r block tax software Most VITA and TCE sites offer free electronic filing. H and r block tax software Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. H and r block tax software Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. H and r block tax software Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. H and r block tax software If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. H and r block tax software The IRS issues more than 9 out of 10 refunds in less than 21 days. H and r block tax software Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. H and r block tax software Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. H and r block tax software The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. H and r block tax software Note, the above information is for our automated hotline. H and r block tax software Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. H and r block tax software Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. H and r block tax software You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. H and r block tax software It can take up to 3 weeks from the date you mailed it to show up in our system. H and r block tax software Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). H and r block tax software You should receive your order within 10 business days. H and r block tax software Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. H and r block tax software If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. H and r block tax software Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. H and r block tax software The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. H and r block tax software These individuals can also contact the IRS through relay services such as the Federal Relay Service. H and r block tax software    Walk-in. H and r block tax software You can find a selection of forms, publications and services — in-person. H and r block tax software Products. H and r block tax software You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. H and r block tax software Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. H and r block tax software Services. H and r block tax software You can walk in to your local TAC for face-to-face tax help. H and r block tax software An employee can answer questions about your tax account or help you set up a payment plan. H and r block tax software Before visiting, use the Office Locator tool on IRS. H and r block tax software gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. H and r block tax software    Mail. H and r block tax software You can send your order for forms, instructions, and publications to the address below. H and r block tax software You should receive a response within 10 business days after your request is received. H and r block tax software Internal Revenue Service 1201 N. H and r block tax software Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. H and r block tax software The Taxpayer Advocate Service (TAS) is your voice at the IRS. H and r block tax software Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. H and r block tax software   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. H and r block tax software We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. H and r block tax software You face (or your business is facing) an immediate threat of adverse action. H and r block tax software You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. H and r block tax software   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. H and r block tax software Here's why we can help: TAS is an independent organization within the IRS. H and r block tax software Our advocates know how to work with the IRS. H and r block tax software Our services are free and tailored to meet your needs. H and r block tax software We have offices in every state, the District of Columbia, and Puerto Rico. H and r block tax software   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at Taxpayer Advocate, or call us toll-free at 1-877-777-4778. H and r block tax software   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. H and r block tax software If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. H and r block tax software Low Income Taxpayer Clinics (LITCs). H and r block tax software   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals and tax collection disputes. H and r block tax software Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. H and r block tax software Visit Taxpayer Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. H and r block tax software Prev  Up  Next   Home   More Online Publications
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Understanding Your CP141L Notice

You are receiving this notice because you didn’t file your return by the due date.


What you need to do

  • Send us the amount due by the date on the notice to avoid interest charges.

You may want to

  • If you think you may have reasonable cause for filing your return late, you need to provide a signed explanation outlining the circumstances which resulted in not filing your return timely.
  • Refer to the “Removal or reduction of penalties” section on your notice.

Answers to Common Questions

Q. What if I disagree with the penalty?

A. Send a written statement outlining the circumstances which resulted in not filing your return timely.

 

Page Last Reviewed or Updated: 21-Jan-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The H And R Block Tax Software

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