Schedule SE (Form 1040) Self-Employment Tax 2007. Summary: This is an example of Schedule SE (Form 1040) 2007 as pertains to the description in the text. The line items completed are:

“Name of person with self-employment income (as shown on Form 1040)” field contains John E. Michaels

“Social security number of person with self-employment income” field contains 011-00-2222

Under “Section A--Short Schedule SE”:

“2. Net profit or (loss) from Schedule C, line 31; Schedule C-EZ, line 3; Schedule K-1 (Form 1065), box 14, code A (other than farming); and Schedule K-1 (Form 1065-B), box 9, code J1. Ministers and members of religious orders, see page SE-1 for amounts to report on this line. See page SE-3 for other income to report” field contains 44,044 Footnote: See Attached Statement.

“3. Combine lines 1 and 2” field contains 44,044

“4. Net earnings from self-employment. Multiply line 3 by 92.35% (.9235). If less than $400, do not file this schedule; you do not owe self-employment tax” field contains 40,675

“5. Self-employment tax. If the amount on line 4 is: $97,500 or less, multiply line 4 by 15.3% (.153). Enter the result here and on Form 1040, line 58. More than $97,500, multiply line 4 by 2.9% (.029). Then, add $12,090 to the result. Enter the total here and on Form 1040, line 58.” field contains 6,223

“6. Deduction for one-half of self-employment tax. Multiply line 5 by 50% (.5). Enter the result here and on Form 1040, line 27” field contains 3,112