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◦ Schedule SE (Form 1040)—Social Security Self-Employment ◦ Schedule 1 (Form 1040)—Additional Income and Adjustments to Income ◦ Form 1040—U.S. Individual Income Tax Return 16.4.3.2.3 By Employee Status A person is an employee if they are under the direct "wield and control" of an employer. The employer has the right to control the method and result of the employee's service. A self-employed person earns income directly from their own business, and: • Does not have federal income tax and FICA payments withheld from a paycheck. • Does not complete a W-4 for an employer. • Is not covered by employer liability insurance or workers' compensation. • Is responsible for their own work schedule. Note A babysitter who works in someone else's home is considered an employee of that household even if the individual employing them does not withhold taxes or FICA. Examples of self-employment include: • Businesses that receive income regularly (for example, daily, weekly, or monthly): ◦ Merchants ◦ Small businesses ◦ Commercial boarding house owners or operators ◦ Owners of rental property • Service businesses that receive income frequently and possibly sporadically: ◦ Craft persons ◦ Repair persons ◦ Franchise holders ◦ Subcontractors ◦ Sellers of blood and plasma ◦ Commission sales persons (such as door-to-door delivery) • Businesses that receive income seasonally: ◦ Summer or tourist-oriented businesses ◦ Seasonal farmers (custom machine operators) ◦ Migrant farm worker crew leaders ◦ Fishers, trappers, or hunters ◦ Roofers • Farming: Farming includes income from cultivating the soil or raising or harvesting any agricultural commodities. It may be earned from full-time, part-time, or hobby farming. 16.4.3.3 Self-Employed Income Sources All self-employment income is earned income, except royalty income and some rental income. Self-employment income is income that is reported to the IRS as farm or other self-employment income or as rental or royalty income. When income is not reported to the IRS, the worker must judge whether or not it is self-employment income. Self-employment income sources are: 1. Business. Income from operating a business.