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If you are self-employed and your earnings are low, your benefit may be worked out on higher earnings than you have. This is called the 'minimum income floor'. The minimum income floor is set at the level of the national minimum wage at the number of hours you would be expected to work.
Report your gross and net income (or loss) from self-employment income on lines 13499 to 14300 of your return. If you have a loss, show it in brackets.
Housing allowance is excludable from gross income for federal and state income tax purposes but not for self-employment tax purposes. When a portion of compensation is received as housing allowance, federal and state taxes are directly reduced.
Some ways to prove self-employment income include: Annual Tax Return (Form 1040) 1099 Forms. Bank Statements. Profit/Loss Statements. Self-Employed Pay Stubs.
At a Glance: Proof of income for self-employed individuals can be shown through a 1099 form from clients, profit and loss statements, bank statements with regular deposits, previous year's federal tax return, or self-created pay stubs. Proof of income is essential for loans, rentals, and various financial transactions.