What this line means
Subtract line 15 from line 14. This is the remaining room under the optional method cap after the farm optional method has been applied. If you used the farm optional method on line 15, that amount reduces the maximum available for the nonfarm optional method on line 17. If you did not use the farm optional method (line 15 is zero), this line equals line 14 — the full cap is available for nonfarm income.
Does this apply to you?
Easy to overlook
The farm method reduces the nonfarm cap even with zero farm income If you entered an amount on line 15 using the farm optional method, that amount reduces the cap available on line 17 for nonfarm income. The two methods share a single pool (line 14). A filer who used $4,000 on line 15 for the farm method has $4,000 less available for the nonfarm method on line 17, regardless of how much nonfarm gross income they have. 1 IRS Schedule SE instructions — Line 16
Skipping this line when using both optional methods overstates SE earnings If you use both the farm and nonfarm optional methods but do not reduce the cap here, you effectively double-count part of the optional method maximum. The nonfarm method on line 17 must be limited to line 16, not line 14. Entering the full line 14 amount on line 17 after already claiming a farm optional method amount produces total optional earnings above the permitted cap. 2 General filing pattern — optional method cap not reduced by farm method
Watch out for this
Entering a negative number. If line 15 exceeds line 14 (which should not happen if the farm optional method is calculated correctly), the result is negative. In this case, the farm optional method amount on line 15 was entered incorrectly — it should never exceed line 14. Go back and correct line 15 before continuing.
Footnotes
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IRS Schedule SE (Form 1040) Instructions, Line 16. https://www.irs.gov/instructions/i1040sse ↩
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IRS Schedule SE (Form 1040) Instructions, Optional Method Limits. https://www.irs.gov/instructions/i1040sse ↩