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:

Optional Method: Farm Self-Employment Income

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 RS 00301.250. For example, for tax year 2008, the maximum amount of farm income reportable using the optional method of reporting is $4200. Further, the maximum gross farm profit is increased to $6300 and the maximum net farm profit is increased to $4548. See 2008 IRS Schedule SE Instructions and IRS Form Schedule SE at http://www.irs.gov.

Last Revised: Aug. 31, 2009