General Instructions

Future Developments

For the latest information about developments related to Form 1040-SS and its instructions, such as legislation enacted after they were published, go to www.irs.gov/form1040ss.

What's New

Maximum income subject to social security tax.   For 2013, the maximum amount of self-employment income subject to social security is $113,700.

Optional methods to figure net earnings.   For 2013, the maximum income for using the optional methods is $4,640.

Additional Medicare Tax.   For 2013, you may be required to pay Additional Medicare Tax. See the instructions for Part I, Line 5, for more information. Also, you may need to report Additional Medicare Tax withheld by your employer. See the instructions for Part I, line 11, for more information.

Reminders

Electronic filing.   You may e-file Form 1040-SS. For general information about electronic filing, visit www.irs.gov/efile.

Estimated tax payments.   If you expect to owe self-employment (SE) tax of $1,000 or more for 2014, you may need to make estimated tax payments. Use Form 1040-ES, Estimated Tax for Individuals, to figure your required payments and for the vouchers to send with your payments.

Maximum income subject to social security tax for 2014.   For 2014, the maximum amount of self-employment income subject to social security is $117,000.

Purpose of Form

This form is for residents of the U.S. Virgin Islands (USVI), Guam, American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), and the Commonwealth of Puerto Rico (Puerto Rico) who are not required to file a U.S. income tax return. Residents of Puerto Rico who wish to file a return in Spanish may file Form 1040-PR in place of Form 1040-SS.

One purpose of the form is to report net earnings from self-employment to the United States and, if necessary, pay SE tax on that income. The Social Security Administration (SSA) uses this information to figure your benefits under the social security program. SE tax applies no matter how old you are and even if you already are receiving social security or Medicare benefits.

See Who Must File below for additional uses of this form.

You may also be required to file an income tax return with the government of Guam, American Samoa, the USVI, the CNMI, or Puerto Rico. Check with your local tax office for more details.

Who Must File

You must file Form 1040-SS if you meet all three requirements below.

  1. You, or your spouse if filing a joint return, had net earnings from self-employment (from other than church employee income) of $400 or more (or you had church employee income of $108.28 or more—see Church Employees, later). However, see Exceptions, later.

  2. You do not have to file Form 1040 with the United States.

  3. You are a resident of:

    1. Guam,

    2. American Samoa,

    3. The USVI,

    4. The CNMI, or

    5. Puerto Rico (you can file either Form 1040-PR (in Spanish) or Form 1040-SS).

Even if you have a loss or little income from self-employment, it may benefit you to file Form 1040-SS and use either "optional method" in Part VI. See Part VI—Optional Methods To Figure Net Earnings, later.

Exceptions.   If (2) and (3) above apply, you also must file Form 1040-SS (or you can use Form 1040-PR in Spanish if you are a resident of Puerto Rico) to:
  • Report and pay household employment taxes;

  • Report and pay employee social security and Medicare tax on (a) unreported tips, (b) wages from an employer with no social security or Medicare tax withheld, (c) uncollected social security and Medicare tax on tips or group-term life insurance (see the instructions for Part I, Line 6, later) or (d) the Additional Medicare Tax (see the instructions for Part I, Line 5, later);

  • Claim excess social security tax withheld;

  • Claim the additional child tax credit (bona fide residents of Puerto Rico only); and

  • Claim the health coverage tax credit (bona fide residents of Puerto Rico only).

Who Must Pay SE Tax

Self-Employed Persons

You must pay SE tax if you had net earnings of $400 or more as a self-employed person. If you are in business (farm or nonfarm) for yourself, you are self-employed.

You must also pay SE tax on your share of certain partnership income and your guaranteed payments. See Partnership Income or Loss in the instructions for Part V, later.

Church Employees

If you had church employee income of $108.28 or more, you must pay SE tax on that income. Church employee income is wages you received as an employee (other than as a minister or member of a religious order) of a church or qualified church-controlled organization that has a certificate in effect electing exemption from employer social security and Medicare taxes.

If your only income subject to self-employment tax is church employee income, skip lines 1a through 4b in Part V. Enter “-0-” on line 4c and go to line 5a.

Ministers and Members of Religious Orders

In most cases, you must pay SE tax on salaries and other income for services you performed as a minister, a member of a religious order who has not taken a vow of poverty, or a Christian Science practitioner. But if you filed Form 4361, Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners, and received IRS approval, you will be exempt from paying SE tax on those net earnings. If you had no other income subject to SE tax and do not owe any of the taxes listed earlier under Who Must File, you are not required to file Form 1040-SS. However, if you had other earnings of $400 or more subject to SE tax, see Part V, line A.

If you have ever filed Form 2031, Revocation of Exemption From Self-Employment Tax for Use By Ministers, Members of Religious Orders, and Christian Science Practitioners, to elect social security coverage on your earnings as a minister, you cannot revoke that election.

If you must pay SE tax, include this income in Part IV, line 1. But do not report it in Part V, line 5a; it is not considered church employee income.

Also include in Part IV, line 1:

  • The rental value of a home or allowance for a home furnished to you (including payments for utilities), and

  • The value of meals and lodging provided to you, your spouse, and your dependents for your employer's convenience.

However, do not include in Part IV,  
line 1:

  • Retirement benefits you received from a church plan after retirement, or

  • The rental value of or allowance for a home furnished to you (including payments for utilities) after retirement.

If you were an ordained minister, a member of a religious order who has not taken a vow of poverty, or a Christian Science practitioner, and were employed by a church (congregation) for a salary, do not include that income in Form 1040-SS, Part IV. Instead, figure your SE tax by completing Part V, including on line 2 this income and any rental (parsonage) allowance or the value of meals and lodging provided to you. On the same line, subtract the allowable amount of any unreimbursed business expenses you incurred as a church employee. Attach an explanation.

For details, see Pub. 517, Social Security and Other Information for Members of the Clergy and Religious Workers.

Members of Recognized Religious Sects

If you have conscientious objections to social security insurance because of your membership in and belief in the teachings of a religious sect recognized as being in existence at all times since December 31, 1950, and which has provided a reasonable level of living for its dependent members, you can request exemption from SE tax by filing Form 4029, Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits. If you filed Form 4029 and have received IRS approval, do not file Form 1040-SS. See Pub. 517 for details.

Employees of Foreign Governments or International Organizations

You must pay SE tax on income you earned as a U.S. citizen or a resident of Puerto Rico employed by a foreign government (or, in certain cases, by a wholly owned instrumentality of a foreign government or an international organization under the International Organizations Immunities Act) for services performed in the United States, Puerto Rico, Guam, American Samoa, the USVI, or the CNMI. Report income from this employment onPart IV, line 1. Enter the net amount from Part IV, line 27, on Part V, line 2. If you performed services elsewhere as an employee of a foreign government or an international organization, those earnings are exempt from SE tax.

Commonwealth or Territory Residents Living Abroad

Generally, if you are a resident of Guam, American Samoa, the USVI, the CNMI, or Puerto Rico living abroad, you must pay SE tax.

Exception.   The United States has social security agreements with many countries to eliminate dual taxes under two social security systems. Under these agreements, you must generally pay social security and Medicare taxes only to the country you live in.

  The United States now has social security agreements with the following countries: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, the Netherlands, Norway, Poland, Portugal, South Korea, Spain, Sweden, Switzerland, and the United Kingdom. Additional agreements are expected in the future.

  If you have questions about international social security agreements, you can:
  1. Visit the SSA's International Programs website at www.socialsecurity.gov/international;

  2. Call the SSA Office of International Programs at 410-965-3322 (not toll free) for questions about the agreements; or

  3. Write to: Social Security Administration, Office of International Programs, P.O. Box 17741, Baltimore, MD 21235-7741 USA. (Do not send Form 1040-SS to this address. Instead, see Where To File , later.)

  
Even if you do not have to pay SE tax because of a social security agreement, you may still have to file a tax return with the Internal Revenue Service.

Chapter 11 Bankruptcy Cases

While you are a debtor in a Chapter 11 bankruptcy case, your net profit or loss from self-employment will be included on the income tax return (Form 1041) of the bankruptcy estate. However, you—not the bankruptcy estate—are responsible for paying self-employment tax on your net earnings from self-employment.

Enter on the dotted line next to line 3 of Form 1040-SS, Part V, “Chap. 11 bankruptcy income” and the amount of your net profit or (loss). Combine that amount with the total of lines 1a, 1b, and 2 (if any) and enter the result on line 3.

For other reporting requirements, see the Instructions for Form 1040.

More Than One Business

If you were a farmer and had at least one other business or you had two or more nonfarm businesses, your net earnings from self-employment are the combined net earnings from all of your businesses. If you had a loss in one business, it reduces the income from another. Complete and file only one Form 1040-SS for any 1 year. Attach a separate Part III or Part IV for each trade or business, and combine the net earnings in a single Part V.

Joint returns.   If both you and your spouse have self-employment income from separate farm or nonfarm businesses, each of you must complete and file a separate Part III or Part IV. Be sure to enter at the top of each Part III or Part IV the name and SSN of the spouse who owns the business. Each of you must also complete a separate Part V. Attach these pages to a single Form 1040-SS.

Business Owned and Operated by Spouses

If you and your spouse jointly own and operate an unincorporated farm or nonfarm business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Do not use Part III or Part IV. Instead, file the appropriate partnership return.

Exception—Qualified joint venture (QJV).    
If you and your spouse materially participate (see Material participation in the 2013 Instructions for Schedule C) as the only members of a jointly owned and operated business, and you file a joint Form 1040-SS for the tax year, you can make a joint election to be taxed as a QJV instead of a partnership. To make this election, you must divide all items of income, gain, loss, deduction, and credit attributable to the business between you and your spouse in accordance with your respective interests in the venture. Each of you must file a separate Part III or Part IV, as well as a separate Part V. On each line of your separate Part III or Part IV, you must enter your share of the applicable income, deduction, or loss. For complete information on this election, see the 2013 Instructions for Schedule E.

  For more information on QJVs, go to IRS.gov and enter “qualified joint venture” in the search box.

Rental real estate business.

If you and your spouse make the election for your rental real estate business, the income generally is not subject to SE tax (for an exception, see item 3 under Other Income and Losses Included in Net Earnings From Self-Employment in the instructions for Part V, later).

If the election is made for a farm rental business that is not included in self-employment, the income is not subject to SE tax. Do not include the income on Form 1040-SS. Depending on the source of the income (possession, U.S. source, or other foreign source), you may need to file other tax forms. See chapter 2 of Pub. 570, Tax Guide for Individuals With Income From U.S. Possessions, and Form 4835, Farm Rental Income and Expenses, for more information.

Exception—Community income.   If you and your spouse wholly own an unincorporated business as community property under the community property laws of a state, foreign country, or U.S. possession, the income and deductions are reported based on the following.
  • If only one spouse participates in the business, all of the income from that business is the self-employment earnings of the spouse who carried on the business.

  • If both spouses participate, the income and deductions are allocated to the spouses based on their distributive shares.

  • If either or both you and your spouse are partners in a partnership, see Partnership Income or Loss in the instructions for Part V, later.

  • If you and your spouse elected to treat the business as a QJV, see Exception—Qualified joint venture (QJV), earlier.

When To File

If you file on a calendar year basis, file by April 15, 2014.

If you file on a fiscal year basis, file by the 15th day of the 4th month after the close of your fiscal year.

Extension of Time To File

If you cannot file Form 1040-SS by the due date, you can get an extension of time to file the form. In some cases, you can get an extension of time to file and pay any tax due.

Bona fide residents of Puerto Rico.   You can apply for an automatic 6-month extension of time to file Form 1040-SS (until October 15, 2014, for calendar year taxpayers). To get this automatic extension, you must file Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return, by the regular due date of your return (April 15, 2014, for calendar year taxpayers). You can file Form 4868 either by paper or electronically through IRS e-file. For details, see the instructions on Form 4868.

This 6-month extension to file does not extend the time to pay your tax. Any interest due on unpaid taxes is calculated from the original due date of the return.

Bona fide residents of American Samoa, the CNMI, Guam, or the USVI.   You can apply for the automatic 6-month extension described above, or you can receive an automatic 2-month extension and then apply for an additional 4-month extension if you still need more time.

Automatic 2-month extension.

You are allowed an automatic 2-month extension to file your return and pay your tax if you are outside the United States and Puerto Rico on the day Form 1040-SS is due (April 15, 2014, for calendar year taxpayers). Although you have an extension of time to pay your tax, interest on any unpaid tax will be charged from the original due date of the return.

To get this automatic extension, you must file Form 1040-SS by the extended due date (June 16, 2014, for calendar year taxpayers) and attach a statement explaining that on the regular due date of your return you were a bona fide resident of American Samoa, the CNMI, Guam, or the USVI.

Additional 4-month extension.

If you cannot file your return within the automatic 2-month extension period, you generally can get an additional 4 months to file your return, for a total of 6 months. File Form 4868 by the new due date allowed by the 2-month extension (June 16, 2014, for calendar year taxpayers). Follow the instructions for completing Form 4868, and be sure to check the box on line 8.

Unlike the original 2-month extension, the additional 4 months of time to file is not an extension of time to pay. You must make an accurate estimate of your tax based on the information available to you. If you find you cannot pay the full amount due with Form 4868, you can still get the extension. You will owe interest on the unpaid amount from the original due date of the return.

Where to file extension requests.    
If you are enclosing a payment, send Form 4868 with your payment to:

Department of the Treasury 
Internal Revenue Service  
P.O. Box 1302 
Charlotte, NC 28201-1302

  If you are not enclosing a payment, send Form 4868 to:

Department of the Treasury 
Internal Revenue Service  
Austin, TX 73301-0045

Where To File

If you are not enclosing a check or money order, send your Form 1040-SS to:

Department of the Treasury  
Internal Revenue Service 
Austin, TX 73301-0215

If you are enclosing a check or money order, send your Form 1040-SS to:

Department of the Treasury  
P. O. Box 1303  
Charlotte, NC 28201-1303


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