1241.Summary Table for Optional Methods of Computing Farm Self-Employment Income
The following table summarizes the effect of the optional method of figuring the amount of self-employment income to be reported when all your earnings are from farm self-employment for taxable years beginning after 1965 and for taxable years after 12/31/07:
If the gross farm income is... | And the net farm profit is... | Then the self-employment income to be reported is: | |
|---|---|---|---|
Regular method | Optional method | ||
Under $600 | Under $400 | None | None |
Under $600 | $400 to $599 | Actual net | None |
$600 to $2,400 | Under $400 | None | Two-thirds of gross |
$600 to $2,400 | $400 to $2,400 | Actual net | Two-thirds of gross |
More than $2,400 | Under $400 | None | $1,600 |
More than $2,400 | $400 to $1,599 | Actual net | $1,600 |
More than $2,400 | $1,600 and over | Actual net | Actual net* |
* Option cannot be used.
NOTE: Effective with tax years after 12/31/07, the maximum amount of income reportable using the optional method of reporting will be equal to the amount of earnings needed to acquire four quarters of coverage (QC) for a given tax year. To determine the amount of earnings needed to acquire a QC or the amount of earnings needed to acquire four QC's for a given tax year or years effective with tax year 1977, and after see Sections 212-212.7 and 1301-1301.2 of the Social Security Handbook. For example, for tax year 2009, the maximum amount of farm income reportable using the optional method of reporting is $4,360. Further, the maximum gross farm profit is increased to $6,540 and the maximum net farm profit is increased to $4,360. See 2009 IRS Schedule SE Instructions and IRS Form Schedule SE at http://www.irs.gov.
Last Revised: Apr. 19, 2010