Methods for Computing Self-Employment Tax (continued)

Nonfarm Optional Method Net Earnings

If the gross income from all nonfarm trade or business is $10,380 or less, and the tests are met, the net earnings will be either:

• Two thirds of gross nonfarm income, or
• Actual net earnings

Under the nonfarm optional method:

• Report up to $6,920 as the net earnings
• Do not report less than the actual net earnings from nonfarm self-employment