Who Must Pay Self-Employment Tax You must pay SE tax and file Schedule SE if you were self-employedand your net earnings from self-employment were $400 or more. Resena de hotel SandnesWho is self-employed?You are self-employed if you carry on a trade or business (such asrunning a farm) as a sole proprietor, an independent contractor, amember of a partnership, or are otherwise in business for yourself. Atrade or business is generally an activity carried on for a livelihoodor in good faith to make a profit. Caution: The SE tax rules apply even if you are fully insured under socialsecurity or have started receiving benefits. Share farmers.You are a self-employed farmer under an income-sharing arrangementif both of the following apply. You produce a crop or raise livestock on land belonging toanother person. Your share of the crop or livestock, or the proceeds fromtheir sale, depends on the amount produced. Your income from the income-sharing arrangement is your SE income. If you produce a crop or livestock on land belonging to anotherperson and are to receive a specified rate of pay, a fixed sum ofmoney, or a fixed quantity of the crop or livestock, and not a shareof the crop or livestock or their proceeds, you may be eitherself-employed or an employee of the landowner. This will depend onwhether the landlord has the right to direct or control yourperformance of service. Example.A share farmer produces a crop on land owned by another person, ona 60-40 crop-share basis. Under the terms of their agreement,the share farmer furnishes the labor and half the cost of seed andfertilizer. The landowner furnishes the machinery and equipment usedto produce and harvest the crop, and half the cost of seed andfertilizer. The share farmer is provided a house in which to live. Thelandowner and the share farmer decide how much of the tract should beplanted in cotton and how much in other crops. In addition, thelandowner is in the hog business and the share farmer agrees to takecare of the landowner's hogs in return for ten hogs. The landownerfurnishes the feed and other necessities and supervises the care ofthe hogs. hotel a FunchalThe share farmer is a self-employed farmer for purposes of theagreement to produce the cotton and other crops, and the sharefarmer's part of the income from the crops is SE income. The sharefarmer is an employee for the services performed in caring for thelandowner's hogs. The fair market value of the ten hogs received isnot SE income but it is taxable for income tax purposes. 4-H Club or FFA project.If your child participates in a 4-H Club or FFA project, any netincome the child receives from sales or prizes related to the projectmay be subject to income tax. Report the net income on line 21 of Form1040. If necessary, attach a statement showing the gross income andexpenses. The net income may not be subject to SE tax if the projectis primarily for educational purposes and not for profit, and iscompleted by the child under the rules and economic restrictions ofthe sponsoring 4-H or FFA organization. Such a project isgenerally not considered a trade or business. Husband and wife partners.You and your spouse may operate a farm as a partnership.(Partnerships are discussed in chapter 2cheap hotels in Strasbourg.)If you and your spouseoperate a farm as partners, report the farm income and expenses onForm 1065, U.S. Partnership Return of Income, and attachseparate Schedules K-1 to show each partner's share of the netincome. Each spouse must report his or her share of partnership incomeon Form 1040 and attach separate Schedules SE (Form 1040) showing eachspouse's self-employment income. However, if your spouse is your employee, not your partner, yourspouse's wages are subject to social security and Medicare taxes. Formore information on employment taxes, see chapter 16.