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variance. If the previous year's tax return is not an accurate reflection of current income, the recent records are to be used to project the annual income.

When the individual is engaged in a new business, they must supply business records for their taxable year-to-date and annual income is to be projected. When the member is engaged in a new business and records are not yet available or the business has been going on for some time, but no records were kept, annual income is determined by using the individual's best estimate. If approved for assistance, the individual must keep records and after no longer than two months actual income must be verified. For information on how to budget seasonal self-employment income, see IHCPPM 2810.40.00. 3410.15.00 ALLOWABLE SELF-EMPLOYMENT COSTS Examples of allowable costs for producing self-employment income are: Wages, commissions, and mandated costs relating to the wages for employees of the self-employed. The cost of shelter in the form of rent, the interest on mortgage or contract payments, taxes, and utilities. The cost of machinery and equipment in the form of rent or the interest on mortgage or contract payments.

Insurance on the real and/or personal property involved. The cost of any repairs needed; and The cost of any travel required. Please, see IHCPPM 2810.30.05 for more information. For all categories of assistance, except MA R and MA Q, allowable expenses include those allowable under the Internal Revenue Code from gross income5 (Refer to 2800 and 3460.05.00). Net profit is the total income derived from a self-employment enterprise less allowable deduction. When self-employment (SE) costs exceed income, a net loss occurs. If the self-employment costs are greater than the self-employment income, then the following rules apply: - For MED 1, 2, 4: Self-employment business losses cannot be used to offset or reduce other, non-self-employment income (i.e. wages). If the costs of producing self-