Self-Employment SR 94-04, 04/94 (AAM-A)

Cash or the dollar value of in-kind benefits received by an individual as compensation for employment from a self-employment enterprise such as farmers, salespeople etc.

Treatment: Earned Income

Average self-employment income over the period of time the income is intended to cover.

Manually subtract the monthly cost of doing business from the average gross monthly self-employment income. If the cost of doing business equals or exceeds the gross self-employment income, there is no countable earned income.

The cost of doing business are the expenses that are directly related to producing the goods or services and without which the good or services could not be produced.

The following expenses are not allowable as a cost of doing business:

• depreciation,

• personal business and entertainment expenses,

• personal transportation,

• payments on the principle of business loans,

• purchase price of capital assets (such as real estate, machinery, and equipment), and

• payments on the principle of the purchase price of capital assets.

See Boarder, Child Care , Roomer and Rental Income for the treatment of those types of self-employment income.