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49 | P a g e October 25 Note: Transportation costs for doing business may be allowed; however, the cost of commuting to the business from home is not allowed. Mileage expense is allowed at the Federal business expense rate. The current rate can be found by searching for the current year standard mileage rate. EXPENSES NOT ALLOWED FOR PRODUCING SELF-EMPLOYMENT INCOME: Non-allowable expenses must be added back into the self-employment income if income tax forms are used or not allowed as a deduction in the monthly calculation of self- employment income. Expenses not allowable include: • Net losses from previous periods • Personal federal, state, and local income taxes; money set aside for retirement purposes; and other work-related expenses such as transportation to and from work • Depreciation is added back into income when it is used as a deduction from self- employment income. Self-employment forms must be reviewed to ensure all depreciation expenses are considered (e.g., Schedule C, line 13; Schedule E, line 20; Schedule F, line 14; Form 8829, line 30; Form 1065-16a; or any income forms attached to the 1065). Depletion and amortization are also not allowed. • Social Security taxes • Meal and entertainment costs • Charitable contributions • Clothing that is not specific to any one job • Penalties and fines • Personal Expenses SELF-EMPLOYMENT CONNECTED TO HOME (E.G. FARM EXPENSES) When a household’s home is on property connected to the property used for farming or another self-employment business enterprise you must determine if the shelter costs (e.g., rent or mortgage) and the self-employment costs can be separately identified. You may be required to determine a breakdown of farm (business) expenses from personal home shelter expenses by using: • Household's calculation of breakdown • Income tax breakdown; OR, • Verifications submitted by the household such as tax verifications (Ag/Nag); loan papers indicating costs of farmland, buildings, equipment, etc. versus costs for