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I put a 0 when prompted to put my "deferred payment " on line 18 of my federal return and sent it off. Mistake? ( I work as a independent hair stylist)

 
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4 Replies
JohnW152
Employee Tax Expert

I put a 0 when prompted to put my "deferred payment " on line 18 of my federal return and sent it off. Mistake? ( I work as a independent hair stylist)

It’s not necessarily a mistake, but it’s a new provision that might benefit you.

A new Part III of Schedule SE, Self-Employment Tax allows self-employed individuals to compute a "maximum amount" of self-employment tax payments that can be deferred.    

Self-employed taxpayers are allowed to pay 50% of Social Security tax on net earnings from self-employment for the period March 27, 2020 through December 31, 2020.  The deferred amount will be paid 50% in 2021, and the rest in 2022.

Line 18 requires taxpayers choosing this deferral to make a reasonable computation of their self-employment income made from March 27, 2020, through December 31, 2020. 

The instructions for Line 18 are very vague, but also open-ended, allowing you to use any reasonable method to calculate the amount:

 

Use any reasonable method to divide the net profit or (loss) you reported on line 3 between (a) January 1, 2020, through March 26, 2020, and (b) March 27, 2020, through December 31, 2020. A reasonable method will accurately reflect the time when income was earned or accrued and deductible expenses were paid or incurred, depending on your method of accounting. In most cases, a proportional division of the amount reported on line 3 based upon the number of days in each period will be considered reasonable.

 

Please see the instructions for Line 18 of Schedule SE in the IRS's 2020 Instructions for Schedule SE for more information.

Also, see the TurboTax Help article How to amend (change or correct) a return you already filed for instruction on how to amend your previously-filed tax return, if that’s something you’d be interested in.

Grends1
New Member

I put a 0 when prompted to put my "deferred payment " on line 18 of my federal return and sent it off. Mistake? ( I work as a independent hair stylist)

How do you deal with a loss from line 3?  On line 18 it won’t allow me to enter a negative number and zero won’t fix the error in turbo tax and let me move on?

Cass0317
Intuit Alumni

I put a 0 when prompted to put my "deferred payment " on line 18 of my federal return and sent it off. Mistake? ( I work as a independent hair stylist)

Please try deleting the entry and leave it blank.

 

If you need further assistance, please reach out to us.

Grends1
New Member

I put a 0 when prompted to put my "deferred payment " on line 18 of my federal return and sent it off. Mistake? ( I work as a independent hair stylist)

Thanks that worked 

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