Small business tax help website
 

Figuring Net Self Employment Income

How to figure out net self employment income?

Net self employment income usually includes all business income less all business deductions allowed for income tax purposes.

Net Self employment income

You must claim all allowable deductions when figuring net self employment income.

Your net self employment income is used to figure your net earnings from self employment.

 
Calculating net self employment income

Your net self employment income can be obtained from the lines of the following schedules listed below:

Schedule C (Form 1040) ........................ line 31

Schedule C-EZ (Form 1040) ................... line 3

Schedule F (form 1040) ......................... line 36

Schedule K-1 (Form 1065) ..................... Box 14, Code A

Schedule K-1 (Form 1065-B) .................. Box 9, Code J1

If you have more than one business, you must combine the net profit (loss) from each business to determine net self employment income.

A loss from one business will reduce your profit from another business. File one Schedule SE showing the net self employment income, but file a separate Schedule C or F for each business.

To arrive at the net earnings, do not reduce your self employment income by any of the following:

  • Deductions for personal exemptions for yourself, your spouse, or dependents
  • The standard deduction or itemized deductions
  • The net operating loss deduction
  • Nonbusiness deductions (including contributions on your behalf to a pension, profit sharing plan, annuity plan, Keogh, SIMPLE or SEP plan)
  • The self employed health insurance deduction
  • The deduction for one half of your self employment tax