Common questions on Schedule SE Self-Employment tax in Lacerte

For Schedule C filers:

1. Go to Screen 16, Business Income (Schedule C).
2. From the Sections list, select Other Information.
3. Select the Not subject to self-employment tax box.

If form 4361 has been filed:

1. Go to Screen 45.1, Self-Employment Tax (Schedule SE).
2. On the line 1=exempt and filed Form 4361 enter a 1.

If form 4029 has been filed:

1. Go to Screen 45.1, Self-Employment Tax (Schedule SE).
2. On the line 1=exempt and filed Form 4029 enter a 1.

To suppress Schedule SE:

1. Navigate to Screen 45, Other Taxes.
2. Select Self-Employment Tax (Schedule SE) in the Taxes box on the left side of the screen.
3. Enter -1 in the field Self-employment tax (SE) [O].

Note: An entry in this field will override the automatic calculation of self-employment tax on Schedule SE for both taxpayer and spouse.

SE farm and non farm income can be increased and decreased on Screen 45.1, Self-Employment Tax (Schedule SE).

Amounts can be entered under Farm "Net income [A]" and under Nonfarm "Net income [A]".

The [A] indicates an adjustment line, which means a negative amount will reduce the amount that is already being reported and a positive amount will add on to the amount that is already being reported.

Part III was added to Schedule SE to allow self-employed persons to figure a maximum amount of self-employment tax payments which may be deferred. All maximum deferral amounts will be carried to Schedule 3 (Form 1040), and the total amount that you may elect to defer may be further reduced.

To make the deferral election in Lacerte 2020:

1. Open the tax return.
2. Open Screen 45.1 Self-Employment Tax (Schedule SE).
3. Check the box for Elect to defer maximum allowed amount of Schedule SE or H taxes to 12/31/21 or 12/31/22.
4. The Schedule SE Part III will still calculate and the deferral amount will transfer to the Schedule 3 line 12e.

Follow these steps to force the Schedule SE:

1. Go to the Input Return tab.
2. On the left-side menu, select Taxes.
3. Click on Self-Employment Tax (Schedule SE).
4. Enter 1 in 1=force Schedule SE, 2=when applicable [Override].

SE tax is calculated based on your income as a self-employed individual; you must pay SE Tax if those earnings are $400 or more.

For detailed information on deciding which method to use, see the IRS Instructions for Schedule SE (Form 1040). Pages SE-1 to 4 describe SE tax and the Simplified method in general, while Page SE-5 explains the advantages to using the Optional method.

To elect the optional method:

1. Go to Screen 45, Other Taxes
2. Click on Self-Employment Tax (Schedule SE) on the left-hand side of the screen
3. Under the Farm or Nonfarm heading (as applicable)
4. Enter Gross income (triggers optional method)

Note: Using the Optional methods may increase the client's benefits, but may also increase their SE tax.