SSA logo: link to Social Security Online home1241. 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:

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 Sections 212-212.7 and 1301-1301.2 of the Social Security Handbook. For example, for tax year 2009, the maximum amount of farm income reportable using the optional method of reporting is $4,360. Further, the maximum gross farm profit is increased to $6,540 and the maximum net farm profit is increased to $4,360. See 2009 IRS Schedule SE Instructions and IRS Form Schedule SE at http://www.irs.gov.

Last Revised: Apr. 19, 2010