Page 7

4. Any amount that exceeds the payment a household receives from a border for lodging and meals. 5. Social Security taxes. 6. Meal and entertainment costs for the household. 7. Charitable contributions. 8. Clothing not specific to any one job. 9. Penalties and fines. 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, the eligibility staff member must determine if the shelter costs (e.g., rent or mortgage) and the self-employment costs can be separately identified. If necessary, the eligibility staff member is required to determine a breakdown of business expenses from personal home shelter expenses by using: 1. Household's calculation of breakdown. 2. Income tax form breakdown; OR 3. Verifications submitted by the household such as: tax verifications (Ag/Nag); loan papers indicating costs of farmland, buildings, equipment, etc. versus costs for house/garage/personal equipment; insurance policy breakdowns of cost of premiums for farm and personal home costs. NOTE: If the household presents self-employment tax records (Schedule F, C, etc.), do not question the shelter deductions (utilities, insurance, interest, etc.) included on those documents.

If utilities are measured and billed separately, the household is entitled to the appropriate mandatory utility allowance for its residence, and to the separately billed utility costs as a self- employment cost of doing business. If utility costs cannot be separately identified, the household is entitled to the appropriate mandatory utility allowance for its residence and does not receive a self-employment expense. NOTE: In most instances a separate amount of utilities should be identifiable. A means of identifying costs separately is to subtract the appropriate mandatory utility allowance for the residence from the total utility costs. The remainder is allowed as a cost of doing business. If the household uses part of the house such as a separate room or a separate apartment solely for the self-employment business and there is a central meter, the household is entitled to the appropriate mandatory utility allowance for its residence and no deduction of utilities for the cost of doing business. IN-HOME EXPENSE: