I
110th CONGRESS
1st Session
H. R. 4215
IN THE HOUSE OF REPRESENTATIVES
November 15, 2007
Mr. Davis of Alabama (for himself and Mr. Lewis of Kentucky) introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to update the optional methods for computing net earnings from self-employment.
Modification to optional method of computing net earnings from self-employment
Amendments to the Internal Revenue Code of 1986
In general
The matter following paragraph (17) of section 1402(a) of the Internal Revenue Code of 1986 is amended—
by striking
$2,400
each place it appears and inserting the upper
limit
, and
by striking
$1,600
each place it appears and inserting the lower
limit
.
Definitions
Section 1402 of such Code is amended by adding at the end the following new subsection:
Upper and Lower Limits
For purposes of subsection (a)—
Lower limit
The lower limit for any taxable year is the sum of the amounts required under section 213(d) of the Social Security Act for a quarter of coverage in effect with respect to each calendar quarter ending with or within such taxable year.
Upper limit
The upper limit for any taxable year is the amount equal to 150 percent of the lower limit for such taxable year.
.
Amendments to the Social Security Act
In general
The matter following paragraph (15) of section 211(a) of the Social Security Act is amended—
by striking
$2,400
each place it appears and inserting the upper
limit
, and
by striking
$1,600
each place it appears and inserting the lower
limit
.
Definitions
Section 211 of such Act is amended by adding at the end the following new subsection:
Upper and Lower Limits
For purposes of subsection (a)—
The lower limit for any taxable year is the sum of the amounts required under section 213(d) for a quarter of coverage in effect with respect to each calendar quarter ending with or within such taxable year.
The upper limit for any taxable year is the amount equal to 150 percent of the lower limit for such taxable year.
.
Conforming amendment
Section 212 of such Act is amended—
in subsection (b),
by striking For
and inserting Except as provided in
subsection (c), for
; and
by adding at the end the following new subsection:
For the purpose of determining average indexed monthly earnings, average monthly wage, and quarters of coverage in the case of any individual who elects the option described in clause (ii) or (iv) in the matter following section 211(a)(15) for any taxable year that does not begin with or during a particular calendar year and end with or during such year, the self-employment income of such individual deemed to be derived during such taxable year shall be allocated to the two calendar years, portions of which are included within such taxable year, in the same proportion to the total of such deemed self-employment income as the sum of the amounts applicable under section 213(d) for the calendar quarters ending with or within each such calendar year bears to the lower limit for such taxable year specified in section 211(k)(1).
.
Effective Date
The amendments made by this section shall apply to taxable years beginning after December 31, 2007.