Four Adjustments to Income (continued)

Self-Employment Tax Deduction

Individuals who have no filing requirement with the United States, but have income connected with a trade or business in Puerto Rico:

• Must file Form 1040 PR U.S. Self Employment Tax Return or Form 1040 SS U.S. Self Employment Tax Return to report their self-employment income
• May have to pay self-employment tax

Individuals who have to file a U.S. Individual Income Tax Return and have income connected with a trade or business in Puerto Rico:

• Cannot take the deduction on Form 1040, line 27 because this deduction is related to excluded income