Form 1040-SS - Jan 2022

Form 1040-SS: Self-employment tax for U.S. territory residents

Who needs to file Form 1040-SS?

Form 1040-SS is used by self-employed residents of Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa and the Commonwealth of the Northern Mariana Islands to report self-employment tax.

Unlike mainland taxpayers who file Schedule SE with Form 1040, eligible territory residents report self-employment tax directly on Form 1040-SS. You generally must file Form 1040-SS if:

• Your net earnings from self-employment were $400 or more.
• You received income from freelance work, independent contracting or operating a business.
• You need to report Social Security and Medicare taxes on self-employment income.

What information do you need to complete Form 1040-SS?

Before filling out Form 1040-SS, gather documents related to your self-employment income and business expenses. Keeping complete income and expense records helps ensure the amounts entered on Form 1040-SS are accurate. Common information needed includes:

• Total self-employment income
• Business expense records
• Prior-year tax documents
• Social Security number or taxpayer identification number
• Records of estimated tax payments, if applicable

How do you report self-employment income on Form 1040-SS?

Form 1040-SS calculates self-employment tax using your net earnings from self-employment. The form includes sections for reporting farming income, business income and church employee income if applicable. To complete the calculation:

• Enter your gross self-employment income.
• Subtract eligible business expenses to determine net earnings.
• Apply the required IRS adjustment factor shown on the form.
• Calculate Social Security and Medicare tax using the form instructions.

What expenses can reduce net earnings on Form 1040-SS?

Eligible business expenses reduce your net earnings from self-employment, which may lower the amount of self-employment tax reported on Form 1040-SS. Keep receipts and supporting records for all deductions claimed on the form. Common deductible expenses include:

• Office supplies and equipment
• Business software and subscriptions
• Advertising and marketing costs
• Business travel expenses
• Professional services and insurance
• Home office expenses if qualified

How do freelancers and independent contractors use Form 1040-SS?

Freelancers, gig workers and independent contractors living in eligible U.S. territories use Form 1040-SS to report self-employment tax instead of Schedule SE. The form is used specifically for reporting Social Security and Medicare taxes on self-employment earnings. This includes individuals who:

• Perform contract or freelance work
• Operate a sole proprietorship
• Earn income from online services or self-employment activities
• Receive payments reported on Forms 1099

What happens if your net earnings are under $400?

If your net earnings from self-employment are less than $400, you generally are not required to file Form 1040-SS for self-employment tax purposes. However, some individuals may still choose to file to:

• Report qualifying self-employment income
• Maintain Social Security earnings records
• Meet other IRS filing requirements

Ready to fill out your Form 1040-SS?

Skip the hassle of printing, handwriting and scanning. Use our fillable Form 1040-SS to report your self-employment tax, enter your earnings details and sign your form digitally.

Fill out Form 1040-SS for free