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Title 7: SNAP Page 65 Iowa Department of Health and Human Services Employees’ Manual Chapter I: Specific Households and Participants Self-Employed Households Revised February 13, 2026 Income Nonallowable Costs of Producing Income Legal reference: 7 CFR 273.11(b)(2) and 273.10(d)(1)(ii) Do not allow the following items as costs of producing income:  Net losses from prior periods. Because net losses from a prior period are not an allowable deduction, do not use capital or supplemental losses shown on current income tax forms to offset self-employment income.  Federal and state income taxes, money set aside for retirement, and other work- related personal expenses (such as transportation to and from work). Such expenses are accounted for by the 20 percent earned income deduction.  Depreciation.  Charitable contributions.  Wages and fringe benefits provided to a household member. Shelter and Utility Deductions Legal reference: 7 CFR 273.9(d)(5)(i); DPL 03-03 Att. 1 A self-employed person who works out of the home may have a single rent payment, or single payments for a mortgage, property taxes, or homeowner’s insurance that includes costs for both the home and the business. For example, most farmers have one mortgage that covers the home, the farmland, and other buildings on the farm. Determine what percentage of the payment is for the home and what percentage is for the business. This information may be available through a variety of sources, including the income tax return, the county assessor’s office, or the lending institution. If you cannot determine what percentage to attribute to the business, do not allow any of these costs as a business expense. Allow the costs as a shelter deduction. When you have determined what percentage of these payments are business costs and what are shelter costs, treat the costs as if they are for separate buildings, as follows:  For the business deduction, allow the percentage of rent, mortgage payment, insurance, and property taxes that is attributed to the business.  For the shelter deduction, allow the percentage of rent, mortgage payment, insurance, and property taxes that is not attributed to the business. Handle utilities as follows:  If a self-employed person who works out of the home claims the entire utility expense as a business expense, do not allow a standard utility allowance.