The following examples illustrate the use of the short and long
forms of Schedule SE (Form 1040).
Short Schedule SE Example
The following example shows how Susan J. Brown fills out
Section A-Short Schedule SE.
Background
Susan J. Brown is the sole proprietor of a dress shop, "Milady
Fashions." She received no wages and she does not own any other
business. Her husband has no interest in her business. Her Schedule C
(Form 1040) shows a net profit of $35,100 in 2001.
Completing Schedule SE
Susan's completed Schedule SE with Short Schedule SE filled out is
shown later.
The following table describes how Susan completes each line on her
schedule.
Table 8. Completing Short Schedule SE
Schedule SE, page 1
If Susan Owned More Than One Business
If Susan were the sole proprietor of more than one business, she
would have combined the profits and losses from all of them and
completed a single Schedule SE.
If Susan Earned Wages
If, in addition to operating her dress shop, she had worked for
wages and the total of her wages and her SE income was more than
$80,400, she would have filled out Long Schedule SE.
If Susan's Husband Had
Income from Self-Employment
Susan's husband has no interest in her business and does not pay SE
tax on this income. If her husband was a partner in the business or
had other income subject to SE tax, he would file a separate Schedule
SE.
Long Schedule SE Example
The following example illustrates how John Clarke fills out
Section B-Long Schedule SE.
Background
John Clarke is single. He is employed as a full-time history
professor at a local university. His wages from this job were $74,000.
John also gives lectures around the country on a freelance basis. His
net profit from these lectures was $15,000, which he reported on
Schedule C-EZ (Form 1040), (not shown).
Because his net profit from lecturing and his wages total more than
$80,400, he must fill out Long Schedule SE.
Completing Schedule SE
John only needs to complete Part I of Long Schedule SE since he is
not using an optional method.
John's completed Long Schedule SE is shown later.
The following table describes how John completes each line.
Table 9. Completing Long Schedule SE
Schedule SE, page 2
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