Income from self-employment is earned income. Self-employment includes, but is not limited to, small business, farming, sales, dressmaking, piecework in the home, roomers, boarders, and rental income received as a result of a client's efforts in managing the property.
When budgeting self-employment income, a month in which business expenses exceed gross earnings does not equal a loss of earned income for that month.
Money paid by roomers or boarders to clients who are self-employed in the business of renting rooms, is earned income.
Verify all self-employment income and business expenses. A self-employed client must keep accurate and complete records of all money received and spent through their self-employment. If the client fails or refuses to keep complete records, the case is ineligible.
The client's records may serve as proof of income and expenses. Accept the client's records as proof of income and expenses unless the information is questionable. If the information provided by the client is questionable, request additional documentation.
Business expenses are the reasonable and necessary costs or expenses of producing self-employment income incurred by the self-employed person. Business expenses must be verified. The client has full responsibility for providing proof of any business expense. See PM 08-01-02-a for allowable business expenses.