When the client has at least one full month of self-employment income and plans to continue to perform self-employment on an ongoing basis, calculate the monthly self-employment income according to these instructions.
- Use the gross self-employment income shown on the person's federal income tax return or the client’s business records. Remember, if the income has substantially changed, to use the verification that best reflects the income for the current or future months.
- Ask if there are self-employment expenses. If the client claims business expenses, subtract 50% from the client’s gross self-employment income.
- Divide any remaining income by the number of months the client was self-employed during the last year or the timeframe the verification covers. Consider the partial first month a person is performing self-employment as a full month when considering how many months a person has worked in the past year.