Use Schedule SE (Form 1040) to figure the tax due on net earnings from self-employment. The Social Security Administration uses the information from Schedule SE to figure your benefits under the social security program. This tax applies no matter how old you are and even if you are already getting social security or Medicare benefits.

See Pub. 225 or Pub. 334.

For 2008, the maximum amount of self-employment income subject to social security tax is $102,000.

The Food, Conservation, and Energy Act of 2008 excludes CRP payments from self-employment tax for individuals receiving social security benefits for retirement or disability. This is effective for payments received after December 31, 2007. See the instructions for line 1b on page SE-3.

Beginning after December 31, 2007, the amount of gross and net income from self-employment you may have when using the farm optional method or nonfarm optional method has increased. This allows electing taxpayers to secure up to four credits of social security benefits coverage. In future years, the thresholds will be indexed to maintain that level of coverage. See Optional Methods on page SE-4.