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Calculating Net Self-Employment Income
AUs who receive self-employment income must report the actual amount of such income on the “Semi-Annual Eligibility Report” (SAR 7) and/or “Self-Employment Sworn Statement” (CSF 35). Add all the gross self-employment income (including capital gains), and exclude either the 40% deduction or the actual, verified, monthly cost of producing the self-employment income.
For the period of time over which self-employment income is averaged, add all gross self-employment income (including capital gains), exclude either the 40% deduction or the actual, verified, monthly cost of producing the self-employment income, and divide the self-employment income by the number of months over which the income will be averaged.
The monthly net self-employment income must be added to any other earned income received by the AU, and compute the net monthly income.
Losses from self-employment as a farmer or a fisherman are offset against any other countable income in the family.
Related Topics
Determination of Self-Employment
Examples of Self-Employment Determinations
Property and Resource Determination
Nonallowable Business Expenses