F Annualizing Self-Employment Example

FAA6.N Examples : 26 Self-Employment Income (SEEI/SEEW) Examples : F Annualizing Self-Employment Example

Annualizing Self-Employment Example

Eva applies and is interviewed on April 30, 2019. Eva makes and sells gift baskets and meets the self-employment definition. Eva does not have a current IRS tax return. She provides the 12 full months of income prior to the month of application as follows:

Month	Income
April 2018	$400
May 2018	$800
June 2018	$650
July 2018	$375
August 2018	$500
September 2018	$325
October 2018	$400
November 2018	$700
December 2018	$1000
January 2019	$350
February 2019	$1200
March 2019	$500
Total	$7200
Average	÷12 $600

Eva’s average monthly income is $600. Eva explained that due to holidays her income fluctuates. She expects the monthly income of $600 to continue. Budget the annualized amount as the monthly income.