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2. Incidental, Unreported Income Earned income that is not reported for tax purposes is nevertheless included in the calculation of the household’s gross income. This income may be verified by a written statement from the payer.

3. Profits from Self Employment Self-employment income is an individual’s income from a private trade or business (including farming). The person’s adjusted gross income is calculated using the IRS Schedules listed below, allowing for certain business deductions, as computed as self-employment income under Federal income tax law. If a household reports a member who is self- employed, their income must be verified by the Internal Revenue Service (IRS) Tax Form 1040 for the most recent, complete calendar year. The adjusted gross income is listed on the lst line of the section on Form 1040 labeled “Adjusted Gross Income”.

In addition to the Form 1040, applicants should have one or more of the schedules dealing with self-employment income:

a) Form 1040 b) Schedule C c) Schedule E d) Schedule F e) Schedule SE f) U.S. Individual Income Tax Return g) Profit or loss from business h) Supplemental income and loss i) Profit or loss from farming j) Self-employment tax

4. Income From the Rental of Property Income from the rental of property is considered earned, self- employment income, and is determined using the methods in number 3, above.

5. Contract Sale of Property Income received in installments from the sale of property is counted as earned income. This income is handled in the same way as self- employment income in that certain expenses may be deducted from the cost of producing the income. Only income based on an actual contracted sale may be counted using the stipulation so the agency should actually see the contract for documentation. Otherwise, the income is counted as rental income. The income may be verified using he methods in number 3, above.