Does Turbo Tax support the self employment tax exemption( not foreign earned income exclusion) because of a Social Security Totalization Treaty with a foreign country?

Forum|Forum|6 years ago
June 4, 2019
3 replies
0 views

does turbo tax support the self employment tax exemption because of a Social Security Totalization Treaty with a foreign country? Will TurboTax support this exemption and allow self-employment income to be reported on form 1040 without computing a liability to pay self-employment tax?I am not asking a question about foreign earned income exclusion.

TurboTax Premier Mac

Best answer by pk12_2

Yes it does.

pk12_2Answer

Employee

Yes it does.

ResonAuthor

Where have you entered this in turbo tax so that SE tax is zero because you are exempt.

Clgordo

did you solve this issue? I have same problem

levon90

You can manually adjust the foreign SE tax-related business income using negative values losses under:
Other tax situations -> Business Taxes -> SE tax

At the same time, mind that IRS will require you to have a 'foreign certificate of coverage' for such SE tax payment avoidance + leave notes under your SE form (wherever you find appropriate in TurboTax).

I don't think reporting losses in such a way is how it is supposed to be done oficcilly, but this is the only technical way if you still want to e-file using the free TurboTax version.

CCrytter

I had a CPA work on this one before and this time as I did my own taxes I went back to my previous one and found a solution:

Since Turbo Tax does NOT print schedule SE (or schedule 2) if you owe 0 taxes, the instruction that says to write “Exempt See attached" does not work.

The workaround based on what my CPA had done was under Schedule 1 part II line 15 “Deductible part of self-employment tax. Attach Schedule SE" write “Exempt, See attached statement" with a certificate of coverage letter attached.

mcook

@CCrytter

Hi,

How did the cpa change this for you on the form in the online version?

I can zero out schedule SE but what are the instructions to modify line 15, deductible part of self -employment?

Thank you in advance!

DaveF1006

It depends. You may try this to offset the adjustment on Line 15.

Log into your account
Select Wages and income>other income
Miscellaneous Income, 1099-A, 1099>start
Scroll to the bottom of the page to Other Reportable Income
Other taxable income, answer yes
Then give a brief description of the income and the amount listed.
For the description, you may enter something like "Offset Deductible Part of Self Employment Tax" and then the amount.

After you perform this task, the deduction will still show on line 15, but the offset will appear in Line 8Z of your Schedule 1 negating the deduction.

@mcook

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"