Page 176

◦ Schedule C (Form 1040) - Business (non-farm) ◦ Schedule E (Form 1040) - Rental and Royalty ◦ Schedule F (Form 1040) - Farm Income ◦ Schedule SE (Form 1040) - Social Security Self-Employment • Other Forms ◦ Schedule D (Form 1040) - Capital Gains and Losses ◦ Schedule 1 (Form 1040) - Additional Income and Adjustments to Income ◦ Form 1040 - U.S. Individual Income Tax Return 15.6.2.3 Employee Status A person is an employee if he or she is 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 his or her own business, and all of the following applies: 1. Does not have federal income tax and FICA payments withheld from a paycheck. Note A babysitter who works in someone else's home is considered an employee of that household, even if the individual employing him or her does not withhold taxes or FICA. 2. Does not complete a W-4 for an employer. 3. Is not covered by employer liability insurance or worker's compensation. 4. Is responsible for his or her own work schedule. 15.6.3 Self-Employment Income Assets 15.6.3.1 Business Assets The value of property essential to self-support and used in a trade or business is excluded if the business is currently operating (see SECTION 15.6.1.3 OPERATING) for the self-support of the individual. This includes real and personal property (e.g., land, buildings, equipment, and supplies) used in a trade or business and liquid assets used as part of a trade or business. If the property is not currently operating, it is exempt if there is a reasonable expectation it will resume operating within the next 12 months. The reasonable expectation should be based on the following information: 1. Date of last use 2. Reason property is not in current use 3. Estimated date the person expects to resume use If the individual decides not to resume operating, the property becomes a countable asset in the month after the decision is made not to resume. The 12-month limit should only be extended when a disabling condition prevents the person from resuming business use of the property. 15.6.3.2 Bank Accounts The value of business bank accounts is disregarded, even if a partner or sole proprietor makes withdrawals from the account for personal use. A bank account is a business account if the individual claims that it is a business account.