Schedule SE (Form 1040), Self-Employment Tax
Use Schedule SE (Form 1040) to calculate the amount of self-employment tax (Social Security and Medicare) you need to pay, which is then reported on Schedule 2 (Form 1040).
Who Should Use Schedule SE?
Schedule SE is used by taxpayers who need to calculate and report self-employment tax on income that isn’t subject to automatic withholding. This includes sole proprietors, gig workers, and small business owners (single-member LLCs or partners). Generally, anyone who has earned more than $400 in self-employment income must file Schedule SE. Those with church employee income of $108.28 or more should also use this form.
How to Complete Schedule SE (Form 1040)
Schedule SE (Form 1040) is two pages and has two (2) sections. At the top of the form, include your name and Social Security number (SSN).
Part I: Self-Employment Tax
If you are a church employee, you can skip lines 1 through 4b (enter “0” on line 4c) and go to line 5a.
Check Box A if you’re a minister, religious order member, or Christian Science practitioner who files Form 4361 but also has $400 in self-employment income from other sources.
Line 1a – Net farm profit or loss from Schedule F or Schedule K-1 (Form 1065) should be entered here. If you use the Farm Optional Method, you’ll go to Part 11, lines 14 and 15, to figure your net earnings.
Line 1b – Enter any Social Security retirement or disability benefits received during your Conservation Reserve Program (CRP) payments, if applicable.
Line 2 – Enter any net profit or loss from Schedule C and Schedule K-1, if applicable. If you use the nonfarm optional method, you’ll go to Part 11, lines 16 and 17, to determine your net earnings.
Line 3 – Add lines 1a, 1b, and 2 together. Put the total here.
Line 4a – Follow the mathematical steps provided.
Line 4b – If you use either the farm optional or Nonfarm Optional Method (or both), you’ll enter the amount from Part 11, line 15 or 17, here.
Line 4c – Follow the mathematical steps provided.
Line 5a – Church employee income is entered here.
Line 5b & 6 – Follow the mathematical steps provided.
Line 7 – This should be pre-filled.
Line 8a – Add your total Social Security wages and tips from Form W-2, as well as any railroad retirement compensation. If the amount exceeds the total in Box 7, skip lines 8b through 10 – go directly to line 11.
Line 8b – Enter any unreported tip income from Form 4137 here.
Line 8c – Wages from Form 8919, line 10, should be reported here.
Line 8d – Follow the mathematical steps provided.
Lines 9 through 13 – Follow the mathematical steps provided.
Part II: Optional Methods To Figure Net Earnings
Lines 14 through 15 – Use these lines if your gross farm income or net profits do not exceed the set limits for the Farm Optional Method.
Lines 16 through 17 – Use these lines if your gross farm income or net profits do not exceed the set limits for the Nonfarm Optional Method.
Need Help?
If you need help completing Schedule SE (Form 1040) or other business tax forms, please contact Tax Defense Network at 855-476-6920 for a free consultation. We offer a variety of affordable tax services, including business tax prep and tax debt resolution.
