Page 255 - Individual Forms & Instructions Guide

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
Lines 4a Through 4c entering it on Schedule SE. See your land. This income is farm earnings. To
Schedule K-1 instructions. If you reduce determine whether you materially par-
If both lines 4a and 4c are less than $400
and you have an amount on line 1b, the amount you enter on Schedule SE, ticipated in farm management or pro-
duction, don’t consider the activities of
you must attach an explanation. Limited
combine lines 1a and 2. partners should include only guaranteed any agent who acted for you. The mate-
• If the total of lines 1a and 2 is payments for services actually rendered rial participation tests for landlords are
$434 or more, file Schedule SE (com-
pleted through line 4c) with your tax re- to or on behalf of the partnership. explained in Pub. 225.
turn. Enter -0- on Schedule 2 (Form If a partner died and the partnership 2. Cash or a payment-in-kind from
1040), line 4.* continued, include in self-employment the Department of Agriculture for par-
• If the total of lines 1a and 2 is less income the deceased's distributive share ticipating in a land diversion program.
than $434, don’t file Schedule SE un- of the partnership's ordinary income or 3. Payments for the use of rooms or
less you choose to use an optional meth- loss through the end of the month in other space when you also provided sub-
od to figure your SE tax. which he or she died. See section stantial services for the convenience of
*If you also have church employee in- 1402(f). your tenants. Examples are hotel rooms,
come (described earlier under Employ- boarding houses, tourist camps or
ees of Churches and Church Organiza- If you were married and both you and homes, trailer parks, parking lots, ware-
tions), also complete lines 5a and 5b. your spouse were partners in a partner- houses, and storage garages. See Pub.
Complete the rest of Schedule SE, as ap- ship, each of you must report your net 334 for more information.
propriate. earnings from self-employment from the 4. Income from the retail sale of
partnership. Each of you must file a sep- newspapers and magazines if you were
Additional Medicare Tax arate Schedule SE and report the part- age 18 or older and kept the profits.
nership income or loss on Schedule E
A 0.9% Additional Medicare Tax may (Form 1040), Part II, for income tax pur- 5. Income you receive as a direct
apply to you if the total amount on line 6 poses. If only one of you was a partner seller. Newspaper carriers or distributors
of all your Schedules SE exceeds one of in a partnership, the spouse who was the of any age are direct sellers if certain
the following threshold amounts (based partner must report his or her net earn- conditions apply. See Pub. 334 for de-
on your filing status). ings from self-employment from the tails.
• Married filing jointly—$250,000 partnership. 6. Amounts received by current or
• Married filing former self-employed insurance agents
separately—$125,000 Community income. Your own distrib- and salespersons that are:
• Single, Head of household, or utive share of partnership income is in- a. Paid after retirement but figured
Qualifying surviving spouse—$200,000 cluded in figuring your net earnings
from self-employment. Unlike the divi- as a percentage of commissions received
If you have both wages and self-em- sion of that income between spouses for from the paying company before retire-
ployment income, the threshold amount figuring income tax, no part of your ment,
for applying the Additional Medicare share can be included in figuring your b. Renewal commissions, or
Tax on the self-employment income is spouse's net earnings from self-employ- c. Deferred commissions paid after
reduced (but not below zero) by the ment. retirement for sales made before retire-
amount of wages subject to Additional Share Farming ment.
Medicare Tax.
You are considered self-employed if you However, certain termination pay-
Use Form 8959, Additional Medicare produce crops or livestock on someone ments received by former insurance
Tax, to figure this tax. For more infor- else's land for a share of the crops or salespersons aren’t included in net earn-
mation, see the Instructions for Form livestock produced (or a share of the ings from self-employment (as ex-
8959, or go to IRS.gov/ADMT. proceeds from the sale of them). This plained in item 10 under Income and
Net Earnings From applies even if you paid another person Losses Not Included in Net Earnings
From Self-Employment, later).
(an agent) to do the actual work or man-
Self-Employment agement for you. Report your net earn- 7. Income of certain crew members
ings for income tax purposes on Sched- of fishing vessels with crews of normal-
In most cases, net earnings include your ule F (Form 1040) and for SE tax purpo- ly fewer than 10 people. See Pub. 334
net profit from a farm or nonfarm busi- ses on Schedule SE. See Pub. 225 for for details.
ness. details. 8. Fees as a state or local govern-
Partnership Income or Loss Other Income and Losses ment employee if you were paid only on
If you were a general or limited partner Included in Net Earnings a fee basis and the job wasn’t covered
in a partnership, include on line 1a or From Self-Employment under a federal-state social security cov-
line 2, whichever applies, the amount of erage agreement.
net earnings from self-employment from 1. Rental income from a farm if, as 9. Interest received in the course of
Schedule K-1 (Form 1065), box 14, landlord, you materially participated in any trade or business, such as interest on
code A. General partners should reduce the production or management of the notes or accounts receivable.
this amount by certain expenses before production of farm products on this

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