- 12 - The last issues before us concern whether petitioners are liable for the self-employment tax and whether petitioners are entitled to a corresponding deduction for one-half of the self- employment tax to be paid. Section 1401(a) imposes a tax upon the self-employment income of every individual. In general, self-employment income consists of the net earnings derived from an individual (other than a nonresident alien) from a trade or business carried on by such an individual. Sec. 1402(a) and (b); sec. 1.1401-1(c), Income Tax Regs. An individual is subject to self-employment tax if his or her net earnings from self-employment exceed $400 for the taxable year. Sec. 1402(b)(2). In this case, although petitioners dispute that Mrs. Harper was an independent insurance agent with Primerica during the taxable year in issue, they do not disagree that Mrs. Harper was at one time an agent for Primerica.1 Moreover, and based on our foregoing discussion, we believe that the income received by Mrs. Harper in 2003 was derived directly from her work as an independent insurance agent with Primerica, either in 2002 or 2003. Accordingly, the Court holds that Mrs. Harper earned income in 2003, and is, therefore, both liable for self- 1 We note that no argument or evidence was presented as to whether Mrs. Harper was an employee or statutory employee under sec. 3121(d).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 NextLast modified: November 10, 2007