Self Employment Income

• Income you receive from the retail sale of newspapers or magazines if you were age 18 or older and kept the profits.

• Income received by a licensed real estate agent or a direct seller if substantially all the pay is directly related to sales and other output  rather than to hours worked and the services are performed under a written contract that provides that you will not be treated as an employee for federal tax purposes.

• Income paid by insurance companies to you as a retired insurance agent that is based on a percentage of commissions received before retirement.

Self employment income and Partnerships

If you are a member of a partnership that carries on a trade or business, your distributive share of its income or loss from the trade or business is included in figuring your self employment income. See Publication 533, Self Employment Tax and 541, Partnerships, for more information.

If you and your spouse operate a business as a partnership, the partnership must report income and expenses on Form 1065, US Return of Partnership Income, along with Schedule K-1, Partner's Share of Income, Credits, Deductions, Etc. You must both report your share of the net income on a Form 1040 and file a separate Schedule SE to report your individual self employment tax.

Ministers, Christian Science Practitioners and Members of religious orders

In most cases, ministers, Christian Science practitioners, and members of religious orders who have not taken a vow of poverty have to pay self employment tax on their earnings. But they can get an exemption from self employment tax on certain earnings by filing Form 4361, Application for Exemption From Self Employment Tax For Use by Ministers, Members of Religious Orders and Christian Science Practitioners. For more information on getting an exemption, see IRS Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.