Originally Posted by Janke

Actually, the instructions about evaluating self-employment are pretty clear, albeit complex. Average is what matters. Determining the period to average over requires you to provide all the specific information on the SSA 820 including number of hours worked in a given month.

A farmer plants a crop in the spring, waters and weeds all summer, harvests in the fall and gets paid, cleans up the field in the winter. Works all year and all months are significant in terms of the payment but only gets paid once. It is more difficult to determine TW months with some businesses, but it is based on the average, not the actual for most self-employment.


5. Averaging Monthly Countable Income

Since self-employment income may fluctuate widely due to transitory business conditions, changes in the nature and size of the business, improved methods of operations, etc., the self-employed person is less likely than an employee to have a uniform income which can be readily compared to the earnings guidelines. Therefore, it is necessary to average the individual’s countable income by figuring total countable income over a representative period and dividing by the number of months in that period. As in the case of employees, income is generally to be averaged over the entire period of work requiring evaluation. However, it will be necessary to average separately the distinct periods of work involved when there is a regulatory change in the SGA earnings level or there is a significant change in work patterns or income.