Amending my 2020 tax return. TurboTax says I must adjust my self-employment tax deferral. Then it says I am not eligible. Caught in a loop! How to break this loop?

[geowien58]

When I filed my 2020 tax return, I did defer self-employment taxes as allowed.  As a result of my amended return, I will receive a refund on taxes paid.  

The software says that I am not allowed to defer the self-employment taxes (associated with this refund from the amended return).  How do I move forward with filing my amended return?

[ZoltanB45]

You cannot defer self-employment taxes if it is going to result in a refund. Even though the refund is from the amend, the software caught the deferral, sees a refund and now disallows it.

You cannot go back and say you aren't deferring the self employment tax either, because you already did defer it.

If you take the self employment taxes you could have been subject to in 2020, you probably would not be owed a refund with this amend anyway.

Try to print out the 1040X after you make the amend. If you can print it, then just mail it out. 

If not, I would suggest contacting the IRS and seeing what can be done. You are deserved of whatever refund resulted from the additions you made, because the self employment tax would be paid eventually if not already.

[geowien58]

Thanks for the reply and your assistance.  I was able to resolve the loop in the TurboTax software by entering the correct info directly into the forms.  (The loop was associated with the step-by-step instructions.)

TurboTax has calculated a lower self-employment deferral for my amended return and a refund based upon this reduced deferral amount.  However, I have already paid the higher deferral amount at the end of Year 2020.  The assumption within TurboTax is that this amount has not been paid. 

Will the IRS recognize that I am owed additional money due to the overpayment and automatically refund the additional amount?  Any suggestions and guidance would be appreciated.

[ZoltanB45]

They might notice that you overpaid self employment tax and refund it, but it is doubtful. I would have mailed in the amended return with a notice explaining the issue.  Wait and see if the refund you get has taken into consideration the self employment tax issue.  If it hasn't then I would advise calling them and requesting guidance. 

If they are no help, enter the amount you overpaid as an estimated payment on next year's return. They will notice there was no estimated payment made,  and will request documentation verifying that you made it. At that time you can explain what happened.