2004 Instructions for Form 1040 (ALL) - Supreme Law Firm
2004 Instructions for Form 1040 (ALL) - Supreme Law Firm
2004 Instructions for Form 1040 (ALL) - Supreme Law Firm
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homes, parking lots, warehouses, and stor- Earnings From Self-Employment) or as an e. The amount of the payment depended<br />
age garages.<br />
employee or employee representative primarily on policies sold by or credited to<br />
4. Income from the retail sale of newsagreement,<br />
or the extent to which those pol-<br />
under the railroad retirement system. your account during the last year of the<br />
papers and magazines if you were age 18 or 2. Fees received <strong>for</strong> services per<strong>for</strong>med<br />
older and kept the profits.<br />
as a notary public. If you had no other intermination,<br />
or both.<br />
icies remain in <strong>for</strong>ce <strong>for</strong> some period after<br />
5. Amounts received by current or <strong>for</strong>f.<br />
The amount of the payment did not<br />
come subject to SE tax, enter “Exempt-Nomer<br />
self-employed insurance agents and tary” on <strong>Form</strong> <strong>1040</strong>, line 57. However, if<br />
salespersons that are:<br />
you had other earnings of $400 or more depend to any extent on length of service or<br />
subject to SE tax, enter “Exempt-Notary” overall earnings from services per<strong>for</strong>med<br />
a. Paid after retirement but figured as a<br />
and the amount of your net profit as a nopercentage<br />
of commissions received from<br />
<strong>for</strong> the company (regardless of whether eli-<br />
tary public from Schedule C or Schedule gibility <strong>for</strong> the payment depended on length<br />
the paying company be<strong>for</strong>e retirement,<br />
C-EZ on the dotted line to the left of Schedb.<br />
Renewal commissions, or<br />
of service).<br />
ule SE, line 3. Subtract that amount from<br />
c. Deferred commissions paid after re- the total of lines 1 and 2 and enter the result<br />
tirement <strong>for</strong> sales made be<strong>for</strong>e retirement. Statutory Employee Income<br />
on line 3.<br />
However, certain termination payments re- 3. Income you received as a retired part- If you were required to check the box on<br />
ceived by <strong>for</strong>mer insurance salespersons ner under a written partnership plan that<br />
Schedule C or C-EZ, line 1, because you<br />
are not included in net earnings from provides <strong>for</strong> lifelong periodic retirement<br />
were a statutory employee, do not include<br />
self-employment (as explained in item 9 payments if you had no other interest in the<br />
the net profit or (loss) from that Schedule<br />
under Income and Losses Not Included in<br />
C, line 31 (or the net profit from Schedule<br />
partnership and did not per<strong>for</strong>m services<br />
Net Earnings From Self-Employment on<br />
C-EZ, line 3), on Short or Long Schedule<br />
<strong>for</strong> it during the year.<br />
this page).<br />
SE, line 2. But if you file Long Schedule<br />
4. Income from real estate rentals if you<br />
6. Income of certain crew members of<br />
SE, be sure to include statutory employee<br />
did not receive the income in the course of<br />
fishing vessels with crews of normally<br />
social security wages and tips from <strong>Form</strong><br />
a trade or business as a real estate dealer.<br />
fewer than 10 people. See Pub. 595 <strong>for</strong> de-<br />
W-2 on line 8a.<br />
Report this income on Schedule E.<br />
tails.<br />
5. Income from farm rentals (including<br />
7. Fees as a state or local government<br />
Optional Methods<br />
employee if you were paid only on a fee<br />
rentals paid in crop shares) if, as landlord,<br />
basis and the job was not covered under a<br />
you did not materially participate in the How Can the Optional Methods<br />
federal-state social security coverage<br />
production or management of the produc- Help You?<br />
agreement.<br />
tion of farm products on the land. See Pub.<br />
Social security coverage. The optional<br />
225 <strong>for</strong> details.<br />
8. Interest received in the course of any<br />
methods may give you credit toward your<br />
trade or business, such as interest on notes 6. Dividends on shares of stock and in- social security coverage even though you<br />
or accounts receivable.<br />
terest on bonds, notes, etc., if you did not have a loss or a small amount of income<br />
9. Fees and other payments received by<br />
receive the income in the course of your from self-employment.<br />
you <strong>for</strong> services as a director of a corporasecurities.<br />
Earned income credit (EIC). Using the op-<br />
trade or business as a dealer in stocks or<br />
tion.<br />
10. Recapture amounts under sections<br />
7. Gain or loss from:<br />
tional methods may qualify you to claim<br />
179 and 280F that you included in gross<br />
the EIC or give you a larger credit if your<br />
a. The sale or exchange of a capital asnet<br />
earnings from self-employment (deterincome<br />
because the business use of the set;<br />
property dropped to 50% or less. Do not<br />
mined without using the optional methods)<br />
b. The sale, exchange, involuntary coninclude<br />
amounts you recaptured on the disversion,<br />
or other disposition of property un-<br />
are less than $1,600. Figure the EIC with<br />
position of property. See <strong>Form</strong> 4797.<br />
and without using the optional methods to<br />
less the property is stock in trade or other see if the optional methods will benefit you.<br />
11. Fees you received as a professional property that would be includible in invenfiduciary.<br />
This may also apply to fees paid tory, or held primarily <strong>for</strong> sale to customers Additional child tax credit. Using the opto<br />
you as a nonprofessional fiduciary if the in the ordinary course of the business; or tional methods may qualify you to claim<br />
fees relate to active participation in the opthe<br />
additional child tax credit or give you a<br />
c. Certain transactions in timber, coal,<br />
eration of the estate’s business, or the manlarger<br />
credit if your net earnings from<br />
or domestic iron ore.<br />
agement of an estate that required extensive<br />
8. Net operating losses from other years.<br />
self-employment (determined without usmanagement<br />
activities over a long period<br />
ing the optional methods) are less than<br />
of time.<br />
9. Termination payments you received<br />
$1,600. Figure the additional child tax<br />
12. Gain or loss from section 1256 con- as a <strong>for</strong>mer insurance salesperson if all of credit with and without using the optional<br />
tracts or related property by an options or the following conditions are met.<br />
methods to see if the optional methods will<br />
commodities dealer in the normal course of a. The payment was received from an benefit you.<br />
dealing in or trading section 1256 coninsurance<br />
company because of services you<br />
tracts.<br />
per<strong>for</strong>med as an insurance salesperson <strong>for</strong> Child and dependent care credit. The op-<br />
the company.<br />
tional methods may help you qualify <strong>for</strong><br />
b. The payment was received after terthis<br />
credit or give you a larger credit if your<br />
Income and Losses Not<br />
mination of your agreement to per<strong>for</strong>m<br />
net earnings from self-employment (deter-<br />
Included in Net Earnings<br />
services <strong>for</strong> the company.<br />
mined without using the optional methods)<br />
are less than $1,600. Figure this credit with<br />
From Self-Employment<br />
c. You did not per<strong>for</strong>m any services <strong>for</strong> and without using the optional methods to<br />
1. Salaries, fees, etc., subject to social<br />
security or Medicare tax that you received<br />
<strong>for</strong> per<strong>for</strong>ming services as an employee, in-<br />
cluding services per<strong>for</strong>med as a public offi-<br />
cial (except as a fee basis government<br />
employee as explained in item 7 under<br />
Other Income and Losses Included in Net<br />
the company after termination and be<strong>for</strong>e<br />
the end of the year in which you received<br />
see if the optional methods will benefit you.<br />
the payment.<br />
Self-employed health insurance deduction.<br />
d. You entered into a covenant not to The optional methods of computing net<br />
compete against the company <strong>for</strong> at least a earnings from self-employment may be<br />
1-year period beginning on the date of ter-<br />
used to figure your self-employed health<br />
mination.<br />
insurance deduction.<br />
SE-3