GovernmentSelf Employment Question and Action
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What do I do when someone tells me that they are self employed or I think they might be self employed?

               
Do they work in Self Employment is it?
YES
Do they run their own business as sole proprietors and use a schedule C when filing taxes?
NO
Do they work for cash, "under the table" or work as Home Depot Day Laborers?
NO
Do they work for a company they own that is registered as a corporation or partnership?
NO
Are they independent contractors or receive a 1099 from their employer or employers for their taxes?

NO

YES

YES


YES


YES


YES
Do they own their own company?
They need to complete the Declaration of Self Employment form with a declaration of their actual profits/income and expense deductions covering the 3 months prior to application along with copy of recent tax return with all forms & schedules.
They need to complete the Declaration of Self Employment form with a declaration of their actual wages covering the 3 months prior to application.
Ask for copies of the wage-stubs they pay themselves along with copy of recent tax return with all forms & schedules. They Do Not Need a Declaration of Self Employment form and Cannot Take Deductions.
They need to complete the Declaration of Self Employment form with a declaration of their actual profits/income and expense deductions covering the 3 months prior to application along with copy of recent tax return with all forms & schedules.

NO

YES







Do they have business royalties or income from a partnership?
Compare declared statement of 3 months income and deductions with last tax return. If numbers differ to become income eligible then is there reason why? Use gross wages declared and eligible deductions.
We use the clients statements. There is no way to verify this type of income. Cannot use deductions
*If any personal expenses are paid for such as bills, mortgage, car payments etc by corporation then request verification of amounts and use as additional income.
Compare declared statement of 3 months income and deductions with last tax return. If numbers differ to become income eligible then is there reason why? Use gross wages declared and eligible deductions.

NO








Are they ministers or persons working in a religious vocation or occupation?
YES
Do they receive any "Church Offerings" or any other forms of compensation?
YES
Ask for verification or declaration of amounts if none on the Declaration of Self Employment form.
 
 

NO


NO






It doesn't sound like they are self employed.
It doesn't sound like they are self employed.