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5. Repayment of the principal of a bank loan. 6. Net losses from previous periods 7. Charitable contributions allowed as a deduction for tax purposes. Costs of Producing Income Costs are allowed when they are billed or otherwise become due. When the income is averaged, only expenses billed or otherwise due in the current 12-month period are allowed. Costs that were billed or otherwise became due in a prior year which are not expected to recur in the current year may not be brought forward to the current year regardless of when they are paid. Allowable Costs Allowable costs of producing self-employment income include but are not limited to: 1. Identifiable costs of labor, stock, raw material, supplies, seed, plants, fertilizer and lime; 2. The interest portion of (a) payments on business or operating loans and (b) payments on

MISSISSIPPI [INCOME: EARNED INCOME]

4107 Volume III | Chapter 4 Revised 11-01-11

income-producing real estate and capital assets such as equipment, machinery and other durable goods; 3. Insurance premiums (such as insurance coverage for machinery equipment, storage buildings, pulpwood trucks or other work vehicles, etc.); 4. Taxes paid on income-producing property; 5. Privilege taxes such as licensing fees and gross receipts and general excise taxes that must be paid in order to earn self-employment income; 6. Business transportation costs such as costs of carrying grain to an elevator, trips to obtain needed supplies, etc. or travel and lodging (but not meals) away from home for a selfemployed salesperson if necessary for the employment operation; 7. Rental payments on income-producing equipment. If a farmer is renting equipment with an option to buy, the rent payments are allowed until the purchase is made; 8. Costs of repairs and maintenance of equipment; and

9. Storage and warehousing charges. It is reasonable to expect that a person who is self-employed will have documents available to verify his business expenses. For the applicant or recipient who is self-employed and has no records documenting his business expenses, follow these procedures: