Instructions for Schedule SE 2019 Checklist
What Schedule SE Does for Tax Year 2019
Schedule SE for tax year 2019 calculates self-employment tax on net earnings from self-employment. The schedule applies to qualifying business income, farm income, certain partnership earnings, and certain clergy and church employee situations. It calculates the Social
Security and Medicare portions of self-employment tax using the rules and limits for 2019.
Schedule SE does not calculate stimulus payments, nor does it calculate Affordable Care Act individual mandate payments for 2019. You report self-employment tax as an “other tax” through
Schedule 2, and you claim the deduction for one-half of self-employment tax as an adjustment to income through Schedule 1. You complete the schedule after you finish the schedules that produce net profit or net loss.
Filing Triggers and Key Thresholds for 2019
Schedule SE filing depends on the amounts computed on Schedule SE itself. The rules use a
$400 net earnings threshold and a separate threshold for church employees. The schedule uses specific lines to apply those triggers, and those lines differ between the short and long sections.
Use these 2019 filing triggers
- You must file Schedule SE if the amount on Short Schedule SE line 4 is $400 or more.
- You must also file Schedule SE if the amount on Long Schedule SE line 4c is $400 or
more.
- You are required to file Schedule SE if you had church employee income of $108.28 or
more, as defined in the Schedule SE instructions.
Approved exemptions can change whether you owe self-employment tax for covered income.
The Schedule SE instructions reference approved Forms 4029 and 4361 for limited religious exemptions, and those approvals control whether an exemption applies.
Income Sources That Feed Schedule SE
Schedule SE uses net earnings from self-employment, and the source lines and boxes matter.
Schedules C, C-EZ, and F provide net profit or loss for most sole proprietors and farmers.
Partnership self-employment earnings come from specific partnership K-1 boxes and codes and not from any K-1 that shows income.
Use these common 2019 inputs
- Schedule C net profit or loss is taken from the net profit line on Schedule C.
- Schedule C-EZ net profit is taken from the net profit line on Schedule C-EZ.
- Schedule F net farm profit or loss is taken from Schedule F, line 34.
- Schedule K-1 (Form 1065) self-employment earnings or loss is taken from box 14, code
A, and related self-employment codes when applicable.
S Corporation pass-through income is generally not self-employment income for Schedule SE.
Shareholder-employee wages are handled through payroll reporting and employment taxes rather than Schedule SE.
Ten-Step Checklist
Step 1: Gather the Correct 2019 Records
Collect Schedule C, Schedule C-EZ, and Schedule F when they apply to your work. Collect partnership Schedule K-1 (Form 1065) statements that report self-employment earnings in box
14 with the applicable code. For contractor payments, look for Form 1099-MISC for 2019 that reports nonemployee compensation, which generally appears in box 7.
Step 2: Confirm Whether Schedule SE Filing Applies
Review your net earnings using the Schedule SE thresholds rather than a general income figure. You file Schedule SE when the amount on Short Schedule SE line 4 or Long Schedule
SE line 4c reaches $400 or more. You also file Schedule SE when you have church employee income of $108.28 or more under the church employee rules described in the instructions.
Step 3: Use the Schedule SE Flowchart to Choose a Section
Use the flowchart on Schedule SE to determine whether you may use the short section or must use the long section. The flowchart controls eligibility and routes you based on specific conditions rather than general complexity. Follow the flowchart result and complete the section it directs you to use.
Step 4: Complete the Profit or Loss Schedules Before Schedule SE
Complete Schedule C, Schedule C-EZ, or Schedule F before you begin Schedule SE. Transfer the final net profit or loss amounts from those schedules onto the Schedule SE lines that request them. Keep each schedule’s totals consistent, since mismatches between schedules can affect both income reporting and self-employment tax.
Step 5: Enter Partnership Self-Employment Earnings Using the Correct Box
and Code
If you are a partner, use Schedule K-1 (Form 1065) box 14 to identify net earnings from self-employment. Use box 14, code A, for net earnings or loss from self-employment, and include other self-employment codes only when the K-1 reports them and the instructions treat them as self-employment earnings. Apply partner status rules that can limit what is included, including limitations that apply to many limited partner items.
Step 6: Compute Net Earnings Using the 92.35 Percent Factor
Compute net earnings from self-employment using the 92.35 percent factor shown on Schedule
SE. This step sets the base amount subject to self-employment tax and reflects the adjustment built into the Schedule SE calculation. Treat this step as part of the self-employment tax computation and not as the deduction for one-half of the self-employment tax.
Step 7: Apply the 2019 Social Security Wage Base and Medicare Rules
Apply the Social Security portion of self-employment tax only up to the 2019 maximum amount subject to Social Security tax, which is $132,900. Apply the Medicare portion of self-employment tax without a wage base cap. If the schedule directs you to consider wages when applying the
Social Security limit, complete the wage lines in the long section exactly as the form instructs.
Step 8: Address Additional Medicare Tax Through Form 8959 When It
Applies
Schedule SE computes the regular self-employment tax and does not compute the 0.9 percent tax. Suppose your income level triggers the Additional Medicare Tax. Complete Form 8959 using the self-employment income amounts and wage amounts required by that form. Carry the
Additional Medicare Tax result to the return as instructed by Form 8959 and the Form 1040 instructions.
Step 9: Transfer Self-Employment Tax and the Deduction to the Correct
2019 Locations
Transfer self-employment tax from Schedule SE to Schedule 2 (Form 1040), line 4 for 2019.
Carry the total from Schedule 2 to Form 1040, line 15, through the Schedule 2 total line shown
on the 2019 return. Transfer the deduction for one-half of self-employment tax from Schedule
SE to Schedule 1 (Form 1040), line 14, and allow it to flow into adjusted gross income.
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Step 10: Handle Clergy and Filing Assembly Requirements Correctly
If you are a minister, include the rental value of a home or a housing allowance, including utilities, in net earnings for self-employment tax when the rules treat it as included. Ministers generally pay self-employment tax on ministerial earnings unless they have an approved exemption, such as Form 4361. Sign and date Form 1040, attach schedules in the order shown by attachment sequence numbers, and keep K-1 statements for your records unless instructions require attachment.
Clergy and Church Employee Notes That Affect the
Calculation
Clergy treatment can differ from typical employee treatment for income tax purposes, and the
Schedule SE instructions address those differences. Ministers can include certain housing amounts in net earnings for self-employment tax, and those amounts affect the self-employment tax base. Approved exemptions, when granted, control whether the self-employment tax applies to covered ministerial earnings.
Church employee income has its filing trigger that uses the $108.28 threshold. This rule applies in defined situations involving a church or a qualified church-controlled organization that elected an exemption from employer Social Security and Medicare taxes. The Schedule SE instructions define the church employee income rule and the conditions that apply to it.
Nonresident Alien Coverage Determinations
Nonresident alien treatment for self-employment tax depends on whether an international social security agreement determines U.S. coverage. A self-employed nonresident alien living in the
United States pays self-employment tax only when the applicable agreement results in U.S.
system coverage. If U.S. coverage applies, the taxpayer completes Schedule SE and files it with
Form 1040NR as instructed.
Significant Changes for Schedule SE 2019
Schedule SE retained its standard structure for 2019. The year-specific items that affect calculations include the 2019 Social Security wage base limit of $132,900 and the continued application of Additional Medicare Tax rules through Form 8959. Accurate line placement on
Schedule 1 and Schedule 2 matters for 2019 because Form 1040 uses those schedules for deductions and other taxes.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
