Instructions for Schedule SE 2015 Checklist
Overview of Schedule SE for Tax Year 2015
Schedule SE for tax year 2015 computes the self-employment tax for individuals with net earnings from self-employment. You use it to calculate the Social Security and Medicare taxes that apply to qualifying self-employment income and to determine the deductible portion of those taxes that reduces adjusted gross income.
Affordable Care Act rules applied in 2015, but Schedule SE did not serve as a reconciliation form for health coverage items. Form 8965 is used to report or claim health coverage exemptions, Form 8962 reconciles advance payments of the premium tax credit, and any shared responsibility payment is reported on Form 1040, line 61.
Who Must File Schedule SE in 2015
Filing requirements for Schedule SE are based on the schedule’s own line thresholds rather than a general idea of business income. The rules focus on net earnings from self-employment as calculated on the schedule.
You must file Schedule SE for 2015 if either of the following applies
- The amount reported on line 4 of the Short Schedule SE or line 4c of the Long Schedule
SE is $400 or more.
- You also had church employee income of $108.28 or more, unless a stated exception
applies.
If neither condition applies, Schedule SE is generally not required.
Income Sources That Can Affect Schedule SE
Schedule SE applies to net earnings from self-employment, which can come from more than one type of income schedule. You should review each source carefully before including it.
Qualifying sources commonly include
- Net profit or loss from Schedule C or Schedule C-EZ
- Net farm profit or loss from Schedule F
- Certain partnership Schedule K-1 (Form 1065) items that represent net earnings from
self-employment
- Certain church employee income subject to self-employment tax rules
W-2 wages generally are not net earnings from self-employment, but the Long Schedule SE uses W-2 Social Security wages and tips to apply the Social Security wage base cap. In certain situations outlined in the Schedule SE instructions, net earnings may include some rental-related income.
Short Versus Long Schedule SE Selection
Do not select Short or Long Schedule SE based on the number of businesses you operate or prior-year estimated tax liability. Follow the IRS flowchart printed on Schedule SE to determine whether you may use Section A or must use Section B.
If you have more than one business subject to self-employment tax, you combine the net earnings and compute the combined self-employment tax on one Schedule SE. The flowchart determines the correct section based on specific conditions and line items.
Ten-Step Filing Checklist
Step 1: Gather Income Schedules and Records
Collect your completed Schedule C, Schedule C-EZ, and Schedule F forms for 2015. Maintain supporting records, including invoices and expense documentation, that support the net profit or loss reported on those schedules.
Step 2: Determine Whether You Must File Schedule SE
Check whether the amount on line 4 of the Short Schedule SE or line 4c of the Long Schedule
SE is $400 or more. Confirm whether you have church employee income of $108.28 or more, since that amount can trigger a filing requirement even when other earnings are lower.
Step 3: Use the Schedule SE Flowchart to Select a Section
Follow the “May I Use Short Schedule SE or Must I Use Long Schedule SE?” flowchart on
Schedule SE. Use the flowchart to determine whether you may complete Section A or must complete Section B based on your income and specific reporting situations.
Step 4: Enter Net Profit or Loss on the Correct Lines
Enter net profit or loss from Schedule C line 31, Schedule C-EZ line 3, or Schedule F line 34, as applicable. Include qualifying partnership self-employment earnings if reported as net earnings from self-employment on the partnership Schedule K-1.
Step 5: Compute Net Earnings Using the 92.35 Percent Factor
Multiply the qualifying net profit or loss by 92.35 percent to determine net earnings from self-employment for the self-employment tax calculation. This step adjusts the tax base used to compute self-employment tax and does not replace the separate deduction for one-half of self-employment tax.
Step 6: Compute Self-Employment Tax in the Correct Schedule Section
Compute self-employment tax in Section A or Section B, Part I of Schedule SE. Apply the Social
Security portion subject to the wage base limit and apply the Medicare portion without a wage base limit.
Step 7: Account for Additional Medicare Tax When Required
Determine whether your combined wages and self-employment income exceed the applicable thresholds for Additional Medicare Tax. If the threshold is exceeded, figure the 0.9 percent
Additional Medicare Tax using Form 8959 and include the result in your overall tax calculation.
Step 8: Report the Deduction for One-Half of Self-Employment Tax
Use Schedule SE to determine the deductible portion of self-employment tax. Report the deduction for one-half of self-employment tax on Form 1040, line 27, for 2015 as an adjustment to income.
Step 9: Attach Schedule SE Using the Attachment Sequence Order
Attach Schedule SE to Form 1040 or Form 1040NR as required. Assemble schedules and forms behind the return using the IRS attachment sequence order shown on each form, noting that Schedule SE has Attachment Sequence No. 17 for 2015.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: Final Review and Filing Steps
Sign and date Form 1040 for 2015 and ensure the Schedule SE amounts match the corresponding Form 1040 line entries. Retain a complete copy of your filed return, and confirm the correct mailing address if you file a paper return.
Nonresident Aliens and Coverage Determinations
Nonresident aliens are not automatically subject to self-employment tax. A self-employed nonresident alien living in the United States must pay self-employment tax only if an international social security agreement determines U.S. coverage. If self-employment income is subject to self-employment tax under that coverage determination, the taxpayer completes
Schedule SE and files it with Form 1040NR. If U.S. coverage does not apply, self-employment tax may not be required.
Spouses Filing Jointly With Self-Employment Income
If both spouses have self-employment income, each spouse must file a separate Schedule SE.
The filing requirement applies to each spouse’s self-employment earnings, even when the spouses file a joint Form 1040. If one spouse qualifies to use Short Schedule SE and the other must use Long Schedule SE, both spouses may use the same physical Schedule SE form. One spouse completes the front for Section A, and the other completes the back for Section B.
2015 Schedule Structure Clarification
For 2015, the Social Security wage base limit and Medicare computation are integrated into the calculation lines in Sections A and B, Part I. Section B, Part II, is reserved for the optional method, which does not include the wage base computation. This structure helps ensure that wage base limits are applied consistently, even when you have multiple sources of self-employment income. Careful use of the flowchart and correct line entries supports accurate reporting.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
