Escenario:
line 8 433 (self-employed) (IT IS MORE THAN 400)
line 9 48465
line 10 31 (adjustment of self-employment tax)
line 11 48434
line 12 20800
line 13 80 (business income deduction)
line 23 62 (SE tax)
and IRS will send a letter explaining the refund of SE tax, 62 dollars.
My question is if I have to do manually in some part of the software the deduction of the business income from form 8995?
Thanks
Best Answer Click here
@eliteincometax wrote:
Escenario:
line 8 433 (self-employed) (IT IS MORE THAN 400)
The threshold for SE tax is not $400 of self employed profit. The threshold is $400 of "net earnings from self-employment". That is 92.35% of the profit.
Interestingly, it seems that ProSeries round the numbers but the IRS does not.
The "net earnings" on $433 of profit is $399.88. ProSeries rounds it to $400, which triggers SE tax. But based on what you are saying, it seems like the IRS is not rounding it, so $399.88 is less than the SE tax threshold.
@eliteincometax wrote:
Escenario:
line 8 433 (self-employed) (IT IS MORE THAN 400)
The threshold for SE tax is not $400 of self employed profit. The threshold is $400 of "net earnings from self-employment". That is 92.35% of the profit.
Interestingly, it seems that ProSeries round the numbers but the IRS does not.
The "net earnings" on $433 of profit is $399.88. ProSeries rounds it to $400, which triggers SE tax. But based on what you are saying, it seems like the IRS is not rounding it, so $399.88 is less than the SE tax threshold.
Thanks so much.
I understand now.
Proseries is rounded to $400. (Schedule SE line 4a).
For me, Proseries is correct because the amounts are always rounded.
I don't know what the IRS is thinking. 😀😂
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