skip navigation

Search Help
Navigation Help
Topic Index
ABCDEFGHI
JKLMNOPQR
STUVWXYZ#
FAQs
Forms
Publications
Tax Topics
Comments
About Tax Map
IRS.gov Website
Publication 560
Left Arrow Previous Page | Table of Contents | Index | Next Page Right Arrow
taxmap/pubs/p560-022.htm#en_us_publink10009063

Chapter 5
Table and Worksheets
for the Self-Employed(p22)

Table and Worksheets for the Self-employed
As discussed in chapters 2 and 4, if you are self-employed, you must use the following rate table or rate worksheet and deduction worksheet to figure your deduction for contributions you made for yourself to a SEP-IRA or qualified plan.
First, use either the rate table or rate worksheet to find your reduced contribution rate. Then complete the deduction worksheet to figure your deduction for contributions.
EIC
The table and the worksheets in chapter 5 apply only to self-employed individuals who have only one defined contribution plan, such as a profit-sharing plan. A SEP plan is treated as a profit-sharing plan. However, do not use this worksheet for SARSEPs.
taxmap/pubs/p560-022.htm#en_us_publink10009065

Rate table for self-employed.(p22)

rule
If your plan's contribution rate is a whole percentage (for example, 12% rather than 121/2%), you can use the table on the next page to find your reduced contribution rate. Otherwise, use the rate worksheet provided below.
First, find your plan contribution rate (the contribution rate stated in your plan) in Column A of the table. Then read across to the rate under Column B. Enter the rate from Column B in step 4 of the Deduction Worksheet for Self-Employed on this page.
taxmap/pubs/p560-022.htm#en_us_publink10009066

Example.(p22)

You are a sole proprietor with no employees. If your plan's contribution rate is 10% of a participant's compensation, your rate is 0.090909. Enter this rate in step 4 of the Deduction Worksheet for Self-Employed on this page.
taxmap/pubs/p560-022.htm#f1235

Deduction Worksheet for Self-Employed

 Step 1   
  Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule C-EZ (Form 1040); line 36, Schedule F (Form 1040)*; or box 14, code A**, Schedule K-1 (Form 1065)*. For information on other income included in net profit from self-employment, see the Instructions for Schedule SE, Form 1040.
  *Reduce this amount by any amount reported on Schedule SE (Form 1040), line 1b. 
  **General partners should reduce this amount by the same additional expenses
 subtracted from box 14, code A to determine the amount on line 1 or 2 of
 Schedule SE 		 
 Step 2   
  Enter your deduction for self-employment tax from Form 1040, line 27
    
 Step 3   
  Net earnings from self-employment. Subtract step 2 from step 1
 Step 4   
  Enter your rate from the Rate Table for Self-Employed or Rate Worksheet for Self-Employed
 Step 5   
  Multiply step 3 by step 4
 Step 6   
  Multiply $245,000 by your plan contribution rate (not the reduced rate)
 Step 7   
  Enter the smaller of step 5 or step 6
 Step 8   
  Contribution dollar limit$49,000 
  •If you made any elective deferrals to your self-employed plan, go to step 9.  
  •Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21.  
 Step 9   
  Enter your allowable elective deferrals (including designated Roth contributions) made to your self-employed plan during 2011. Do not enter more than $16,500
 Step 10   
  Subtract step 9 from step 8
 Step 11   
  Subtract step 9 from step 3 
 Step 12   
  Enter one-half of step 11
 Step 13   
  Enter the smallest of step 7, 10, or 12
 Step 14   
  Subtract step 13 from step 3
 Step 15   
  Enter the smaller of step 9 or step 14
  •If you made catch-up contributions, go to step 16.  
  •Otherwise, skip steps 16 through 18 and go to step 19.  
 Step 16   
  Subtract step 15 from step 14
 Step 17   
  Enter your catch-up contributions (including designated Roth contributions), if any. Do not enter more than $5,500
 Step 18   
  Enter the smaller of step 16 or step 17
 Step 19   
  Add steps 13, 15, and 18.
 Step 20   
  Enter the amount of designated Roth contributions included on lines 9 and 17.
 Step 21   
  Subtract step 20 from step 19. This is your maximum deductible contribution.
      
 Next: Enter your actual contribution, not to exceed your maximum deductible contribution, on Form 1040, line 28.  
taxmap/pubs/p560-022.htm#en_us_publink10009067

Rate worksheet for self-employed.(p22)

rule
If your plan's contribution rate is not a whole percentage (for example, 101/2%), you cannot use the Rate Table for Self-Employed. Use the following worksheet instead.
Rate Worksheet for Self-Employed
1)Plan contribution rate as a decimal (for example, 101/2% = 0.105)
2)Rate in line 1 plus 1 (for example, 0.105 + 1 = 1.105)
3)Self-employed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example, 0.105 ÷ 1.105 = 0.095)
taxmap/pubs/p560-022.htm#en_us_publink10009068

Figuring your deduction.(p23)

rule
Now that you have your self-employed rate from either the rate table or rate worksheet, you can figure your maximum deduction for contributions for yourself by completing the Deduction Worksheet for Self-Employed.
taxmap/pubs/p560-022.htm#en_us_publink10009069
Community property laws.(p23)
If you reside in a community property state and you are married and filing a separate return, disregard community property laws for step 1 of the Deduction Worksheet for Self-Employed. Enter on step 1 the total net profit you actually earned.
taxmap/pubs/p560-022.htm#f1236

Deduction Worksheet for Self-Employed

 Step 1   
  Enter your net profit from line 31, Schedule C (Form 1040); line 3, Schedule C-EZ (Form 1040); line 36, Schedule F (Form 1040)*; or box 14, code A**, Schedule K-1 (Form 1065)*. For information on other income included in net profit from self-employment, see the Instructions for Schedule SE, Form 1040. $200,000
  *Reduce this amount by any amount reported on Schedule SE (Form 1040), line 1b. 
  **General partners should reduce this amount by the same additional expenses
 subtracted from box 14, code A to determine the amount on line 1 or 2 of
 Schedule SE 		 
 Step 2   
  Enter your deduction for self-employment tax from Form 1040, line 279,299
    
 Step 3   
  Net earnings from self-employment. Subtract step 2 from step 1190,701
 Step 4   
  Enter your rate from the Rate Table for Self-Employed or Rate Worksheet for Self-Employed0.078 
 Step 5   
  Multiply step 3 by step 414,875 
 Step 6   
  Multiply $245,000 by your plan contribution rate (not the reduced rate)20,825 
 Step 7   
  Enter the smaller of step 5 or step 6 14,875 
 Step 8   
  Contribution dollar limit$49,000 
  •If you made any elective deferrals to your self-employed plan, go to step 9.  
  •Otherwise, skip steps 9 through 20 and enter the smaller of step 7 or step 8 on step 21.  
 Step 9   
  Enter your allowable elective deferrals (including designated Roth contributions) made to your self-employed plan during 2011. Do not enter more than $16,500 N/A
 Step 10   
  Subtract step 9 from step 8
 Step 11   
  Subtract step 9 from step 3 
 Step 12   
  Enter one-half of step 11
 Step 13   
  Enter the smallest of step 7, 10, or 12
 Step 14   
  Subtract step 13 from step 3
 Step 15   
  Enter the smaller of step 9 or step 14
  •If you made catch-up contributions, go to step 16.  
  •Otherwise, skip steps 16 through 18 and go to step 19.  
 Step 16   
  Subtract step 15 from step 14
 Step 17   
  Enter your catch-up contributions (including designated Roth contributions), if any. Do not enter more than $5,500
 Step 18   
  Enter the smaller of step 16 or step 17
 Step 19   
  Add steps 13, 15, and 18.
 Step 20   
  Enter the amount of designated Roth contributions included on lines 9 and 17
 Step 21   
  Subtract step 20 from step 19. This is your maximum deductible contribution$14,875
      
  Next: Enter your actual contribution, not to exceed your maximum deductible contribution, on Form 1040, line 28.  
Rate Table for Self-Employed
Column A
If the plan contri-
bution rate is:
(shown as %)		Column B
Your
rate is:
(shown as decimal)
1.009901
2.019608
3.029126
4.038462
5.047619
6.056604
7.065421
8.074074
9.082569
10.090909
11.099099
12.107143
13.115044
14.122807
15.130435
16.137931
17.145299
18.152542
19.159664
20.166667
21.173554
22.180328
23.186992
24.193548
25* .200000*
*The deduction for annual employer contributions (other than elective deferrals) to a SEP plan, a profit-sharing plan, or a money purchase plan cannot be more than 20% of your net earnings (figured without deducting contributions for yourself) from the business that has the plan.
taxmap/pubs/p560-022.htm#en_us_publink10009070

Example.(p23)

You are a sole proprietor with no employees. The terms of your plan provide that you contribute 81/2% (.085) of your compensation to your plan. Your net profit from line 31, Schedule C (Form 1040) is $200,000. You have no elective deferrals or catch-up contributions. Your self-employment tax deduction on line 27 of Form 1040 is $9,299. See the filled-in portions of both Schedule SE (Form 1040), Self-Employment Income, and Form 1040, later.
You figure your self-employed rate and maximum deduction for employer contributions you made for yourself as follows.
See the filled-in Deduction Worksheet for Self-Employed on this page.
Rate Worksheet for Self-Employed
1)Plan contribution rate as a decimal (for example, 101/2% = 0.105) 0.085
2)Rate in line 1 plus 1 (for example, 0.105 + 1 = 1.105)1.085
3)Self-employed rate as a decimal rounded to at least 3 decimal places (line 1 ÷ line 2) (for example, 0.105 ÷ 1.105 = 0.095)0.078
taxmap/pubs/p560-022.htm#f46574n0401

taxmap/pubs/p560-022.htm#en_us_publink10009071
Left Arrow Previous Page | Table of Contents | Top of Page | Index | Next Page Right Arrow