Publication 560 
2008 Tax Year 
5.
Table and Worksheets for the SelfEmployed
As discussed in chapters 2 and 4, if you are selfemployed, you must use the following rate table or rate worksheet and deduction
worksheet to
figure your deduction for contributions you made for yourself to a SEPIRA or qualified plan.
First, use either the rate table or rate worksheet to find your reduced contribution rate. Then complete the deduction worksheet
to figure your
deduction for contributions.
The table and the worksheets in chapter 5 apply only to selfemployed individuals who have only one defined contribution plan,
such as a
profitsharing plan. A SEP plan is treated as a profitsharing plan. However, do not use this worksheet for SARSEPs.
Rate table for selfemployed.
If your plan's contribution rate is a whole percentage (for example, 12% rather than 12½%), you can use the following
table to find
your reduced contribution rate. Otherwise, use the rate worksheet provided later.
First, find your plan contribution rate (the contribution rate stated in your plan) in Column A of the table. Then read across to the
rate under Column B. Enter the rate from Column B in step 4 of the Deduction Worksheet for SelfEmployed.
Example.
You are a sole proprietor with no employees. If your plan's contribution rate is 10% of a participant's compensation, your
rate is 0.090909. Enter
this rate in step 4 of the Deduction Worksheet for SelfEmployed.
Deduction Worksheet for SelfEmployed

Step 1






Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule CEZ (Form 1040); line
36, Schedule F (Form 1040); or box 14, code A*, Schedule K1 (Form 1065)




*General partners should reduce this amount by the same additional expenses
subtracted from box 14, code A to determine the amount on line 1 or 2 of
Schedule SE



Step 2






Enter your deduction for selfemployment tax from line 27, Form 1040



Step 3






Net earnings from selfemployment. Subtract step 2 from step 1



Step 4






Enter your rate from the Rate Table for SelfEmployed orRate Worksheet for
SelfEmployed 


Step 5






Multiply step 3 by step 4



Step 6






Multiply $225,000 by your plan contribution rate (not the reduced rate)



Step 7






Enter the smaller of step 5 or step 6



Step 8






Contribution dollar limit

$45,000



•

If you made any elective deferrals to your selfemployed plan, go to step 9. 




•

Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21. 



Step 9






Enter your allowable elective deferrals (including designated Roth contributions) made to your
selfemployed plan during 2007. Do not enter more than $15,500



Step 10






Subtract step 9 from step 8



Step 11






Subtract step 9 from step 3




Step 12






Enter onehalf of step 11



Step 13






Enter the smallest of step 7, 10, or 12



Step 14






Subtract step 13 from step 3



Step 15






Enter the smaller of step 9 or step 14




•

If you made catchup contributions, go to step 16. 




•

Otherwise, skip steps 16 through 18 and go to step 19. 



Step 16






Subtract step 15 from step 14



Step 17






Enter your catchup contributions (including designated Roth contributions), if any. Do not enter more
than $5,000



Step 18






Enter the smaller of step 16 or step 17



Step 19






Add steps 13, 15, and 18.



Step 20






Enter the amount of designated Roth contributions included on lines 9 and 17.



Step 21






Subtract step 20 from step 19. This is your maximum deductible contribution.









Next: Enter this amount on line 28, Form 1040.



Rate worksheet for selfemployed.
If your plan's contribution rate is not a whole percentage (for example, 10½%), you cannot use the Rate Table for
SelfEmployed. Use the following worksheet instead.
Rate Worksheet for SelfEmployed
1)

Plan contribution rate as a decimal (for example, 10½% = 0.105)


2)

Rate in line 1 plus 1 (for example, 0.105 + 1 = 1.105)


3)

Selfemployed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example,
0.105 ÷ 1.105 = 0.095)


Figuring your deduction.
Now that you have your selfemployed rate from either the rate table or rate worksheet, you can figure your maximum
deduction for contributions for
yourself by completing the Deduction Worksheet for SelfEmployed.
Community property laws.
If you reside in a community property state and you are married and filing a separate return, disregard community
property laws for step 1 of the
Deduction Worksheet for SelfEmployed. Enter on step 1 the total net profit you actually earned.
Deduction Worksheet for SelfEmployed

Step 1






Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule CEZ (Form 1040); line
36, Schedule F (Form 1040); or box 14, code A*, Schedule K1 (Form 1065)

$200,000



*General partners should reduce this amount by the same additional expenses
subtracted from box 14, code A to determine the amount on line 1 or 2 of
Schedule SE



Step 2






Enter your deduction for selfemployment tax from line 27, Form 1040

8,723


Step 3






Net earnings from selfemployment. Subtract step 2 from step 1

191,277


Step 4






Enter your rate from the Rate Table for SelfEmployed or Rate Worksheet for
SelfEmployed 
0.078


Step 5






Multiply step 3 by step 4

14,920


Step 6






Multiply $225,000 by your plan contribution rate (not the reduced rate)

19,125


Step 7






Enter the smaller of step 5 or step 6

14,920


Step 8






Contribution dollar limit

$45,000



•

If you made any elective deferrals to your selfemployed plan, go to step 9. 




•

Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21. 



Step 9






Enter your allowable elective deferrals (including designated Roth contributions) made to your
selfemployed plan during 2007. Do not enter more than $15,500

N/A


Step 10






Subtract step 9 from step 8



Step 11






Subtract step 9 from step 3




Step 12






Enter onehalf of step 11



Step 13






Enter the smallest of step 7, 10, or 12



Step 14






Subtract step 13 from step 3



Step 15






Enter the smaller of step 9 or step 14




•

If you made catchup contributions, go to step 16. 




•

Otherwise, skip steps 16 through 18 and go to step 19. 



Step 16






Subtract step 15 from step 14



Step 17






Enter your catchup contributions (including designated Roth contributions), if any. Do not enter more
than $5,000



Step 18






Enter the smaller of step 16 or step 17



Step 19






Add steps 13, 15, and 18.



Step 20






Enter the amount of designated Roth contributions included on lines 9 and 17



Step 21






Subtract step 20 from step 19. This is your maximum deductible contribution 
$14,920









Next: Enter this amount on line 28, Form 1040.


Rate Table for SelfEmployed
Column A If the plan contri
bution rate is:
(shown as %) 
Column B Your
rate is:
(shown as decimal) 
1

.009901

2

.019608

3

.029126

4

.038462

5

.047619

6

.056604

7

.065421

8

.074074

9

.082569

10

.090909

11

.099099

12

.107143

13

.115044

14

.122807

15

.130435

16

.137931

17

.145299

18

.152542

19

.159664

20

.166667

21

.173554

22

.180328

23

.186992

24

.193548

25*

.200000*

*The deduction for annual employer contributions (other than elective deferrals) to a SEP
plan, a profitsharing plan, or a money purchase plan cannot be more than 20% of your net earnings (figured without deducting
contributions for
yourself) from the business that has the plan.

Example.
You are a sole proprietor with no employees. The terms of your plan provide that you contribute 8½% (.085) of your compensation
to
your plan. Your net profit from line 31, Schedule C (Form 1040) is $200,000. You have no elective deferrals or catchup contributions.
Your
selfemployment tax deduction on line 27 of Form 1040 is $8,723. See the filledin portions of both Schedule SE (Form 1040),
SelfEmployment Income,
and Form 1040, later.
You figure your selfemployed rate and maximum deduction for employer contributions you made for yourself as follows.
See the filledin Deduction Worksheet for SelfEmployed later.
Rate Worksheet for SelfEmployed
1)

Plan contribution rate as a decimal (for example, 10½% = 0.105)

0.085

2)

Rate in line 1 plus 1 (for example, 0.105 + 1 = 1.105)

1.085

3)

Selfemployed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example,
0.105 ÷ 1.105 = 0.095)

0.078

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