Rev. Rul. 58-137

The Internal Revenue Service has prepared an optional table, as set out below, for the use of taxpayers, to eliminate the necessity of making computations involving fractions or decimals, in determining the amount of self-employment tax on Form 1040, `U.S. Individual Income Tax Return.'

Section 1401 of the Self-Employment Contributions Act (chapter 2, subtitle A, of the Internal Revenue Code of 1954) provides that, in addition to other taxes there shall be imposed for each taxable year, on the self-employment income of every individual, a tax of three and three-eighths percent of the amount of self-employment income for any taxable year beginning after December 31, 1956, and before January 1, 1960. This tax is to be reported on the Individual Income Tax Return, Form 1040.

Under the provisions of section 6102 of the Internal Revenue Code of 1954, and the regulations prescribed thereunder, the Secretary of the Treasury or his delegate is authorized to provide, with respect to any amount required to be shown on a form prescribed for any internal revenue return, that if such amount of such item is other than a whole-dollar amount, either the fractional part of a dollar shall be disregarded, or the fractional part of a dollar shall be disregarded unless it amounts to one-half dollar or more, in which case the amount (determined without regard to the fractional part of a dollar) shall be increased by one dollar. See section 301.6102-1 of the Regulations on Procedure and Administration.

The table has been developed as a simple method of computing the self-employment tax for the year 1957 which is at the rate of three and three-eighths percent. The table will eliminate the necessity for making any computations involving fractions or decimals. For example, a taxpayer having self-employment income of $862.81 would merely consult the table and enter a tax of $29 in separate Schedule C or F and in line 15, page 1, Form 1040. If an exact computation had been made by multiplying out the three and three-eighths percent rate the tax on $862.81 would have been $29.12. Similarly, a taxpayer with self-employment income of $855.70 would enter a tax of $29 from the table, whereas the tax would be $28.88 if computed by the long method.

Copies of the table are available in offices of the District Directors of Internal Revenue and may be privately reproduced.

                  OPTIONAL SELF-EMPLOYMENT TAX TABLE