SE-1 Cat. No. 24334P 1999 Instructions for Schedule SE, Self-Employment Tax Use Schedule SE (Form 1040) to figure the tax due on net earnings from self-employment. The Social Security Administration uses the information from Schedule SE to figure your benefits under the social security program. This tax applies no matter how old you are and even if you are already getting social security or Medicare benefits. Additional Information. See Pub. 533 for more details. General Instructions A Change To Note For  1999,  the  maximum  amount  of  self- employment income subject to social secu- rity tax is $72,600. Who Must File Schedule SE You must file Schedule SE if: 1. You were self-employed and your net earnings from self-employment from other than church employee income were $400 or more, or 2.  You had church employee income of $108.28    or    more—see    Employees    of Churches    and    Church    Organizations below. Who Must Pay Self- Employment (SE) Tax? Self-Employed Persons You must pay SE tax if you had net earnings of $400 or more as a self-employed person. If you are in business for yourself or you are a farmer, you are self-employed. You must also pay SE tax on your share of certain partnership income and your guar- anteed payments. See Partnership Income or Loss on page SE-2. Employees of Churches and Church Organizations If   you   had   church   employee   income   of $108.28  or  more,  you  must  pay  SE  tax. Church employee income is wages you re- ceived as an employee (other than as a min- ister or member of a religious order) from a church or qualified church-controlled or- ganization  that  has  a  certificate  in  effect electing an exemption from employer social security and Medicare taxes. Ministers and Members of Religious Orders In most cases, you must pay SE tax on sal- aries and other income for services you per- formed   as   a   minister,   a   member   of   a religious order who has not taken a vow of poverty, or a Christian Science practitioner. But if you filed  Form 4361  and received IRS   approval,   you   will   be   exempt   from paying SE tax on those net earnings. If you had no other income subject to SE tax, write “Exempt–Form  4361”  on  line 50 of Form 1040. However, if you had other earnings of $400 or more subject to SE tax, see line A at the top of Long Schedule SE. Note. If you have ever filed Form 2031 to elect social security coverage on your earn- ings as a minister, you cannot revoke that election now. If   you   must   pay   SE   tax,   include   this income on line 2 of either Short or Long Schedule SE. But do not report it on line 5a of Long Schedule SE; it is not considered church employee income. Also, include on line 2:   The rental value of a home or an al- lowance for a home furnished to you (in- cluding payments for utilities) and   The    value    of    meals    and    lodging provided to you, your spouse, and your de- pendents for your employer’s convenience. However, do not include on line 2:   Retirement benefits you received from a church plan after retirement, or   The rental value of a home or an al- lowance for a home furnished to you (in- cluding payments for utilities) after retirement. If you were a duly ordained minister who was an employee of a church and you must pay SE tax, the unreimbursed business ex- penses that you incurred as a church em- ployee   are   allowed   only   as   an   itemized deduction for income tax purposes. Subtract the allowable amount from your SE earnings when figuring your SE tax. If you were a U.S. citizen or resident alien serving outside the United States as a min- ister or member of a religious order and you must pay SE tax, you may not reduce your net earnings by the foreign housing exclu- sion or deduction. For more details, see Pub. 517. Members of Certain Religious Sects If   you   have   conscientious   objections   to social  security  insurance  because  of  your membership in and belief in the teachings of a religious sect recognized as being in existence at all times since December 31, 1950, and which has provided a reasonable level of living for its dependent members, you are exempt from SE tax if you received IRS approval by filing  Form 4029. In this case, do not file Schedule SE. Instead, write “Exempt–Form  4029”  on  Form 1040, line 50. See Pub. 517 for more details. U.S. Citizens Employed by Foreign Governments or International Organizations You must pay SE tax on income you earned as a U.S. citizen employed by a foreign gov- ernment (or, in certain cases, by a wholly owned instrumentality of a foreign govern- ment or an international organization under the International Organizations Immunities Act) for services performed in the United States,    Puerto    Rico,    Guam,    American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI), or the Virgin Is- lands. Report income from this employment on Schedule SE (Section A or B), line 2. If you performed services elsewhere as an em- ployee of a foreign government or an inter- national   organization,   those   earnings   are exempt from SE tax. U.S. Citizens or Resident Aliens Living Outside the United States If you are a self-employed U.S. citizen or resident   alien   living   outside   the   United States, in most cases you must pay SE tax. You may not reduce your foreign earnings from    self-employment    by    your    foreign earned income exclusion. Exception. The United States has social se- curity agreements with many countries to eliminate dual taxes under two social secu- rity systems. Under these agreements, you must generally pay social security and Med- icare taxes to only the country you live in. The United States now has social security agreements  with  the  following  countries: