Turbo tax did a calculation that reduced my self employment tax by half: Line 13 Deduction for one-half of self-employment tax. IRS says it's incorrect, wants the other

[paul27]

My tax was cut in half. Turbo said to pay such amount in tax to the IRS. I did. The IRS says it's incorrect and want's the other half but now with interest and penalty. Turbo made a mistake here? How and why?

[Critter]

What tax form and which tax year ?

1/2 of the SE tax has always been an adjustment to the tax return ... on the 2018 it is on line 27 of the Sch 1 and on the 2017 return line 27 of the 1040... and that is correct.

So what is the IRS really saying ?

[VolvoGirl]

For 2017 and prior the full self employment tax is on 1040 line 57and is included in the total tax due on your return.  There are several other places that you have to deduct 1/2 of the SE tax to calculate other items but not for the tax.   We don't know where is line 13 you mentioned.

[paul27]

2018 tax year. my self employment tax is one figure but turbo took half of that off on the schedule SE. The IRS is saying, where's the other half of that tax, they want it. line 13 of the 1040 individual. The amount turbo told me to pay in self employment tax was incorrect according to the IRS.

[paul27]

Turbo tax told me the tax that was due, i paid it...IRS says no, the SE TAX was understated... what's the best way to go forward with this?

[VolvoGirl]

We have never heard of that before.  They must be saying something else.  The SE Tax is on 1040 Schedule 4 line 57.  Do you have that?  Is line 57 right?

I think they might be saying you didn't report all your self employment income on schedule C so you owe more SE tax.  They might have got a 1099Misc you missed entering.

you need to call the IRS and ask them.

[paul27]

I found the paper from the IRS. it says "we found a miscalculation on your 2018 form 1040, which affects the following area of your return; Earned income tax credit. We changed your return to correct this error." Now i owe 500 bucks. All the calculations were done by Turbo Tax. Now what?

[paul27]

hi. I found the paper from the IRS. it says "we found a miscalculation on your 2018 form 1040, which affects the following area of your return; Earned income tax credit. We changed your return to correct this error." Now i owe 500 bucks. All the calculations were done by Turbo Tax. Now what?   

[macuser_22]

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@paul27 wrote:

hi. I found the paper from the IRS. it says "we found a miscalculation on your 2018 form 1040, which affects the following area of your return; Earned income tax credit. We changed your return to correct this error." Now i owe 500 bucks. All the calculations were done by Turbo Tax. Now what?   

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Miscalculation in IRS speak means that they changed something that in turn caused something else to calculate differently.  That does not mean that the TurboTax calculations based on what you entered were wrong, but they probably changed or disallowed all of the income that you reported which in turn caused the EIC to calculate differently.

[VolvoGirl]

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@paul27 wrote:

I found the paper from the IRS. it says "we found a miscalculation on your 2018 form 1040, which affects the following area of your return; Earned income tax credit. We changed your return to correct this error." Now i owe 500 bucks. All the calculations were done by Turbo Tax. Now what?

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So is your SE tax ok?    Did you mix up SE with EIC?

[paul27]

Hi. I called them up. Turbo tax said my earned income credit was 373.00 and the IRS says the max allowed is 25.00. So now I owe that and pay a penalty soon but interest included. They asked me why and i still don't know. How can i see how the program calculated it?