Page 365

For the period of time over which self-employment income is determined, the EW shall add all gross self-employment income (including capital gains), exclude the cost of producing the selfemployment income, and divide the balance by the number of months over which the income will be averaged. For those TANF cases whose self-employment income is not averaged but is instead calculated on an anticipated basis, the EW shall add any capital gains the family anticipates it will receive in the next 12 months, starting with the date the application is filed, and divide this amount by 12. This amount shall be used in successive certification periods during the next 12 months, except that a new average monthly amount shall be calculated over this 12 month period if the amount of anticipated capital gains changes. The EW shall then add the anticipated monthly amount of capital gains to the anticipated monthly self-employment income, and subtract the cost of producing the self-employment income. The cost of producing the self-employment income shall be calculated by anticipating the monthly allowable costs of producing the self-employment income.

4106 Volume III | Chapter 4

Expenses must always be handled the same as the self-employment income to which they apply, i.e. annualize expenses if income is averaged, average expenses over the period of time they are intended to cover if income is averaged over the period of time it is intended to cover and count expenses in the month billed if income is counted in the month received. To be allowed as a business expense, the expense must be incurred in producing the selfemployment income and must be reasonably attributed to the production of the income. Thus, business expenses reasonably attributed to the production of income can be deducted when verified or documented from a source which adequately establishes the amount of the expense. The types of business expenses will vary with the kinds of business enterprises. The worker will have to use his knowledge of business enterprises in the community. Questions on the reasonableness of business expenses may be referred through normal channels to the Economic Assistance Policy Unit, if necessary. These business expense items are not allowable deductions: 1. Amounts for depreciation since these amounts represent a decrease in the value of the asset for wear and use and are not a real financial cost. 2. Mortgage costs. 3. Payments on fixed assets or durable goods. 4. Personal business and entertainment expenses, including personal transportation expenses, Federal, State, and local income taxes; money set aside for retirement purposes. MISSISSIPPI [ INCOME: EARNED INCOME]

Revised 11 - 01 - 11