Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Adjustments to Income

Adjustments to Income

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
Adjusted Gross Income section of Form 1040 with line 27 crossed out.