20 CFR 404.1081 - General rules for figuring net earnings from self-employment.

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§ 404.1081 General rules for figuring net earnings from self-employment.

(a) Determining net earnings.

(1) In determining your gross income and the deductions attributable to your trade or business for the purpose of determining your net earnings from self-employment, the provisions that apply to the taxes imposed by sections 1 and 3 of the Code are used.

(2) If you use the accrual method of accounting to figure your taxable income from a trade or business, you must use the same method in determining your net earnings from self-employment.

(3) If you are engaged in a trade or business of selling property on the installment plan and elect, under the provisions of section 453 of the Code, to use the installment method of accounting in figuring your income, you must use the installment method in determining your net earnings from self-employment.

(4) Any income which can be excluded from gross income under any provision of subtitle A of the Code cannot be counted in determining your net earnings from self-employment, unless -

(i) You are a resident of Puerto Rico (see § 404.1089);

(ii) You are a minister or member of a religious order (see § 404.1091);

(iii) You are a United States citizen or resident engaged in a trade or business outside the United States (see § 404.1092); or

(iv) You are a citizen of, or have income from sources within, certain possessions of the United States (see § 404.1093).

(b) Trade or business carried on. You must carry on the trade or business either personally or through agents or employees. Income from a trade or business carried on by an estate or trust is not included in determining the net earnings from self-employment of the individual beneficiaries of the estate or trust.

(c) Aggregate net earnings. If you are engaged in more than one trade or business, your net earnings from self-employment consist of the total of the net income and losses of all the trades or businesses you carry on. A loss in one trade or business you carry on offsets the income from another trade or business.

(d) Partnerships. When you have net earnings from self-employment from a partnership as described in § 404.1080 (a) and (b), those net earnings are combined with your other net earnings from self-employment in determining your total net earnings from self-employment for the taxable year.

(e) Different taxable years. If you are a partner and your taxable year is different from that of the partnership, you must include, in figuring your net earnings from self-employment, your distributive share of the income or loss of the partnership for its taxable year ending with or within your taxable year. For the special rule in case of the termination of a partner's taxable year as a result of death, see § 404.1087.

(f) Meaning of partnerships. A partnership for social security purposes is one that is recognized as a partnership for income tax purposes. For income tax purposes, the term partnership includes not only a partnership as known under common law, but also a syndicate, group, pool, joint venture, or other unincorporated organization that carries on any trade or business, financial operation, or venture, and which is not a trust, estate, or a corporation.

(g) Proprietorship taxed as domestic corporation. If you are a proprietor of an unincorporated business enterprise and have elected to be taxed as a domestic corporation, you must figure your net earnings from self-employment without regard to the election you have made.

[45 FR 20075, Mar. 27, 1980, as amended at 50 FR 36574, Sept. 9, 1985]

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code
U.S. Code: Title 31 - MONEY AND FINANCE

§ 401 - Trust Funds

§ 402 - Old-age and survivors insurance benefit payments

§ 403 - Reduction of insurance benefits

§ 404 - Overpayments and underpayments

§ 405 - Evidence, procedure, and certification for payments

§ 405 note - Evidence, procedure, and certification for payments

§ 406 - Representation of claimants before Commissioner

§ 409 - “Wages” defined

§ 410 - Definitions relating to employment

§ 410a - Transferred

§ 411 - Definitions relating to self-employment

§ 412 - Self-employment income credited to calendar years

§ 413 - Quarter and quarter of coverage

§ 414 - Insured status for purposes of old-age and survivors insurance benefits

§ 415 - Computation of primary insurance amount

§ 416 - Additional definitions

§ 417 - Benefits for veterans

§ 418 - Voluntary agreements for coverage of State and local employees

§ 418 note - Voluntary agreements for coverage of State and local employees

§ 421 - Disability determinations

§ 421 note - Disability determinations

§ 422 - Rehabilitation services

§ 423 - Disability insurance benefit payments

§ 424a - Reduction of disability benefits

§ 425 - Additional rules relating to benefits based on disability

§ 428 - Benefits at age 72 for certain uninsured individuals

§ 429 - Benefits in case of members of uniformed services

§ 430 - Adjustment of contribution and benefit base

§ 431 - Benefits for certain individuals interned by United States during World War II

§ 433 - International agreements

§ 902 - Commissioner; Deputy Commissioner; other officers

§ 902 note - Commissioner; Deputy Commissioner; other officers

§ 909 - Delivery of benefit checks

§ 1320a-6

§ 1320a-8a

§ 1320b-13

§ 1320b-17

Statutes at Large

Title 20 published on 2015-04-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 20 CFR Part 404 after this date.

  • 2015-10-30; vol. 80 # 210 - Friday, October 30, 2015
    1. 80 FR 66843 - Vocational Factors of Age, Education, and Work Experience in the Adult Disability Determination Process; Extending of the Comment Period
      GPO FDSys XML | Text
      Advance notice of proposed rulemaking; extension of the comment period.
      The comment period for the advanced notice of proposed rulemaking published on September 14, 2015 (80 FR 55050), is extended. To ensure that your written comments are considered, we must receive them on or before December 14, 2015.
      20 CFR Parts 404 and 416