Who must complete a Schedule SE?

When you earn money that does not have Medicare and Social Security taxes withheld from your pay, you must use Schedule SE to figure and pay these taxes. Everyone who has earnings that are subject to self-employment tax must complete this Schedule  and file it with your tax return. This includes anyone who received:

  • $108.28 or more in church employee income, OR
  • $400 or more in net self-employment earnings (not including church employee income)

If you had earnings subject to self-employment tax during the tax year, then you must file Schedule SE and pay self-employment taxes even if:

  • You have a full-time job as a W-2 employee
  • You earned self-employment income through part-time work or casual labor
  • You receive social security retirement benefits or a pension
  • You are under the age of 18 or over the age of 65

The only earnings that are treated as church employee income are wages you received as an employee of a qualified church or a church-controlled organization with a current certificate electing to exempt the organization from the employer portion of social security and Medicare taxes.

Income you receive as salary or as payment for performing services as a minister, Christian Science Practitioner or a member of a religious order may have a different tax treatment. You must report this income using the correct Schedule  and pay self-employment tax on it unless you have filed Form 4361 and received approval from the IRS. In most cases, you should include this type of income on Line 2 of Schedule SE but since it is not considered church employee income, you should not include it on line 5a of the Schedule .

There are myriad rules governing self-employment tax in specific situations that may apply to U.S. taxpayers who live or work outside the U.S., dual citizens, nonresident aliens, U.S. citizens who are employed by foreign governments or international organizations, members of certain religious sects, taxpayers who are debtors in a bankruptcy case filed under Chapter 11 and numerous others. If you don’t earn much income from your self-employment, familiarize yourself with the IRS minimum requirement. Refundable tax credits may still be available to you.

Determining how much self-employment income you received and how to report self-employment earnings can be complex. Carefully review the instructions for filing Schedule SE before submitting your return.

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