Page 139

S N A P M A N U A L

139 If using Schedule E (Supplemental Income and Loss), Lines 3 & 4; or Schedule F (Profit or Loss From Farming), Line 9.

If the only member of the LLC is a corporation, the LLC income and expenses are reported on the corporation’s return, usually Form 1120-S (see below) or Form 1120 (U.S. Corporation Income Tax Return) Line 3 or subtract Line 2 from Line 1 (if no amount is listed on Line 3).

Multiple Member LLCs would report income and expenses on a partnership return, Form 1065. Contracted Employment (Sub- contract)

A person contracted to perform work or provide services to an entity as a non-employee. As a result, this individual must pay his/her own Social Security and Medicare taxes. If no income is listed on Line 3 of Schedule 1 of Form 1040, use the income from Line 3 of Schedule SE.

For self-employed households who own an incorporated business, the worker must determine whether this business is legally incorporated and whether the business is considered an "S Corporation". An "S Corporation" is a small closely held family corporation.

1) For legally incorporated businesses that are "S Corporations", the business income will be reported together with the household's other income on Form 1040 and attached schedules. Accordingly, income from the "S Corporation" will be treated as self-employment income and annualized. The business income is computed by using Form 1120-S, U.S. Income Tax Return for an S Corporation, line 1c (add line 5 if an amount is listed) and by using the percentage the client owns in the business, see Schedule K-1 (Form 1120-S) Part II, Line G (if applicable).