applies to it until the amount of the self-employment income reaches the maximum amount for the 12.4 percent old age, survivors and disability insurance (OASDI) portion of the self-employment tax. This maximum amount is $94,200 for 2006. Because this amount represents the amount after multiplying the net self-employment income by 92.35 percent, the The income of a newspaper carrier who is under age 18 is not subject to the self-employment tax (Sections 1402(c)(2)(A) and 3121(b)(14)(B)). This rule also applies to carriers of magazines who are under age 18.

The carrier must distribute the newspapers or magazines to the ultimate consumer for a fixed price. The compensation of the carrier must be based solely on the difference between what the price the carrier sells the newspapers or magazines to the consumer and their cost to the carrier.

The newspaper or magazine may guarantee a minimum amount of compensation to the carrier or credit the carrier with unsold and/or returned newspapers or magazines. The newspaper or magazine may not pay the carrier an hourly wage or a fixed salary. A written contract must provide that the newspaper or magazine will not treat the carrier as an employee for federal tax purposes.

If a teenager makes over $400 in adjusted net income from most other self-employment activities, the teenager would be subject to self-employment tax. The self-employment tax rate is 15.3 percent. The adjusted net income from self-employment is the net income from the business multiplied by 92.35 percent. Therefore, to have a self-employment tax liability, the net income from the activity must exceed $433.13 ($400 / 0.9235).

Once the self-employment income exceeds this amount, the self-employment tax rate applies to it until the amount of the self-employment income reaches the maximum amount for the 12.4 percent old age, survivors and disability insurance (OASDI) portion of the self-employment tax. This maximum amount is $94,200 for 2006. Because this amount represents the amount after multiplying the net self-employment income by 92.35 percent, the u

t be based solely on the difference between what the price the carrier sells the newspapers or magazines to the consumer and their cost to the carrier.

The newspaper or magazine may guarantee a minimum amount of compensation to the carrier or credit the carrier with unsold and/or returned newspapers or magazines. The newspaper or magazine may not pay the carrier an hourly wage or a fixed salary. A written contract must provide that the newspaper or magazine will not treat the carrier as an employee for federal tax purposes.

If a teenager makes over $400 in adjusted net income from most other self-employment activities, the teenager would be subject to self-employment tax. The self-employment tax rate is 15.3 percent. The adjusted net income from self-employment is the net income from the business multiplied by 92.35 percent. Therefore, to have a self-employment tax liability, the net income from the activity must exceed $433.13 ($400 / 0.9235).

Once the self-employment income exceeds this amount, the self-employment tax rate applies to it until the amount of the self-employment income reaches the maximum amount for the 12.4 percent old age, survivors and disability insurance (OASDI) portion of the self-employment tax. This maximum amount is $94,200 for 2006. Because this amount represents the amount after multiplying the net self-employment income by 92.35 percent, the

t pay the carrier an hourly wage or a fixed salary. A written contract must provide that the newspaper or magazine will not treat the carrier as an employee for federal tax purposes.

If a teenager makes over $400 in adjusted net income from most other self-employment activities, the teenager would be subject to self-employment tax. The self-employment tax rate is 15.3 percent. The adjusted net income from self-employment is the net income from the business multiplied by 92.35 percent. Therefore, to have a self-employment tax liability, the net income from the activity must exceed $433.13 ($400 / 0.9235).

Once the self-employment income exceeds this amount, the self-employment tax rate applies to it until the amount of the self-employment income reaches the maximum amount for the 12.4 percent old age, survivors and disability insurance (OASDI) portion of the self-employment tax. This maximum amount is $94,200 for 2006. Because this amount represents the amount after multiplying the net self-employment income by 92.35 percent, the

loyment tax rate is 15.3 percent. The adjusted net income from self-employment is the net income from the business multiplied by 92.35 percent. Therefore, to have a self-employment tax liability, the net income from the activity must exceed $433.13 ($400 / 0.9235).

Once the self-employment income exceeds this amount, the self-employment tax rate applies to it until the amount of the self-employment income reaches the maximum amount for the 12.4 percent old age, survivors and disability insurance (OASDI) portion of the self-employment tax. This maximum amount is $94,200 for 2006. Because this amount represents the amount after multiplying the net self-employment income by 92.35 percent, the

applies to it until the amount of the self-employment income reaches the maximum amount for the 12.4 percent old age, survivors and disability insurance (OASDI) portion of the self-employment tax. This maximum amount is $94,200 for 2006. Because this amount represents the amount after multiplying the net self-employment income by 92.35 percent, the unadjusted amount of self-employment income subject to the OASDI portion of the self-employment tax is $102,003.24 ($94,200 / 0.9235).

The unadjusted self-employment income is the amount of the net income reported on Schedule C of Form 1040 (Schedule F for a farmer). No ceiling applies to the 2.9 percent portion of the self-employment tax for Medicare purposes.

The exemption from the self-employment tax for newspaper or magazine carriers who are under age 18 makes the choice of doing such work more attractive to such teenagers who need a part-time or summer job.