Net farm income or loss |
This is your net farm income or loss. This should include
both the net farm profit or loss from Schedule F along with any income from
farm partnerships. Please note that if your gross farm income is $2,400 or
less and your net farm income is $1,733 or less there is a "Farm Optional
Method" for calculating
income subject to self employment taxes. If you qualify for this optional method
it may produce a slightly lower income subject to self employment taxes. This
calculator assumes that you will not use the "Farm Optional Method".
For more information see IRS Schedule SE Part II, Optional Methods to Figure
Net Earnings. |
Net business income or loss |
This is your net income from businesses and partnerships.
These amounts are reported on IRS Schedule C for sole proprietorships and IRS
Schedule K-1 for partnerships. Do not include any farm partnerships; this income
should be included in the net farm income or loss.In most cases you will need
to pay self-employment taxes on salaries received for services performed as
a minister. This also includes the rental value of a home and the value of
meals and lodging provided to you, your spouse and your family. Include income
received for services performed as a minister in your "net business income
or loss", do not include
it in "Church employee income". There are a number of exceptions
for ministers and members of religious orders, in regards to self-employment
tax liability. Please see the detailed instructions for self-employment taxes
as provided by the IRS to determine how these rules might apply to your specific
situation. |
Self-employment income |
This is your total income subject to self-employment
taxes. This is calculated by taking your total "net farm income or loss" and "net
business income or loss" and multiplying it by 92.35%. This is done to
adjust your net income downward by the total employment tax that would have
been paid by an employer, had you not been self-employed. If the result is
less than $400.00, you do not owe any self-employment tax on this income. |
Church employee income |
If you have more than $108.28 in church employee income,
you will need to pay self-employment taxes on that income. This does not include
any income you received as a minister, which was entered above. |
Net church employee income |
This is your total church income subject to self-employment
taxes. Like your other self-employment income, this total is calculated by
multiplying your church employee income by 92.35%. If this amount is less than
$100, you do not owe any self-employment taxes on this income. |
Employer paid income |
Enter your total employment wages and tips that you have
been paid where social security taxes have been deducted. In 2005, income up
to $90,000 is subject to the 12.4% tax paid for social security portion of
self-employment taxes (FICA). Your employment wages and tips should have a
6.2% deduction for social security from your pay, which is matched with a 6.2%
payment from your employer. If your total wages, tips and self-employment income
exceed $90,000 you only owe social security on the difference between your
self-employment income and $90,000. If your total employment wages and tips
exceed $90,000 in 2005 you will not owe any additional FICA taxes for the year. |