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half self employment tax deduction missing 2018

Forum|Forum|6 years ago
September 26, 2019
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Hello,

Just started schedule c. The deduction appears on form 1 line 27, but the total tax due is showing the full amount without the half self employment tax deduction. Do certain expenses have to be entered first before the deduction appears in the total tax due?

TurboTax Home & Biz Windows

Best answer by VolvoGirl

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 27. The SE tax is already included in your tax due or reduced your refund. It is on the 1040 Schedule 4 line 57 which goes to 1040 line 14. The SE tax is in addition to your regular income tax on the net profit.

Schedule C net Profit or Loss now goes to 1040 Schedule 1 line 12. Then the total on schedule 1 line 22 goes to 1040 line 6. It is listed to the left of line 6 and is added into the total on line 6. So line 6 can be more or less than the total of lines 1-5.

For the half SE tax adjustment on schedule 1 line 27. It's tricky.

Schedule 1 Line 22 gets added to 1040 line 6

Adjustments on Schedule 1 line 36 gets subtracted from 1040 line 6 and entered on line 7.

VolvoGirl

Employee

The deduction for half the SE tax only reduces your AGI for regular income tax. So even if you reduce your income and tax to zero you will still owe the full SE tax.

VolvoGirlAnswer

Employee

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment. You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400. The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare. So you get social security credit for it when you retire. You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 27. The SE tax is already included in your tax due or reduced your refund. It is on the 1040 Schedule 4 line 57 which goes to 1040 line 14. The SE tax is in addition to your regular income tax on the net profit.

Schedule C net Profit or Loss now goes to 1040 Schedule 1 line 12. Then the total on schedule 1 line 22 goes to 1040 line 6. It is listed to the left of line 6 and is added into the total on line 6. So line 6 can be more or less than the total of lines 1-5.

For the half SE tax adjustment on schedule 1 line 27. It's tricky.

Schedule 1 Line 22 gets added to 1040 line 6

Adjustments on Schedule 1 line 36 gets subtracted from 1040 line 6 and entered on line 7.