What is self-employment income?

Self-employment income is generally any net profit which you received from your part-time or full-time self-employment work. However, rental income from real estate, capital gains, and dividends and interest do not generally count as self-employment income. You can use Schedule C of Form 1040 to calculate your net earnings if you were a sole proprietor, and you can also use Schedule C if you were an independent contractor. If you were a partner, you should use Schedule K-1 of Form 1065 to calculate your net earnings.

Where you have more than one self-employment jobs, your net profit from all of these jobs is combined in determining your self-employment net earnings. Thus, a loss from one job would serve to reduce your overall self-employment income, thus lowering your net earnings and what you will ultimately owe for your self-employment tax. You should use a separate Schedule C for each such self-employment job (although you only need to use one Schedule SE to calculate your combined self-employment tax).

If you are married and both you and your spouse have self-employment income, you must each use separate Schedule C’s and Schedule SE’s in calculating your self-employment income and the self-employment tax owed on that income. However, if you and your spouse are filing jointly, you can each attach these separate schedules to your single joint return.