Please fix Schedule C "Personal services not a material income producing factor"

[greg7]

There is a checkbox in Schedule C labeled "Personal services not a material income producing factor" that needs to be changed to "business is a personal service activity".

The current checkbox label is misleading and will be checked for any business where personal service is not a material income producing factor (just about all businesses).  The result of checking this box is that self-employment income is reduced to $0.  THIS IS NOT CORRECT.

In my case, checking this box caused the SEP IRA calculation to be $0 and trying to force the tool to recognize the self-employment income resulted in a several thousand dollar tax error that I now need to fix.

With the way the tool uses this checkbox, I believe it should be changed to "business is a personal service activity." - the opposite of what it says now.

I believe this checkbox is trying to determine whether there is material participation and is written incorrectly, thus misleading to tax preparers.

Material participation test line G of the Sch C. Mainly in regards to this here:

The activity is a personal service activity in which you materially participated for any 3 prior tax years. A personal service activity is an activity that involves performing personal services in the field of health, law, engineering, architecture, accounting, actuarial science, performing arts, or consulting, or any other trade or business in which capital is not a material income-producing factor.