I don't remember reporting this. Where can I find it in my taxes. What do I do? I don't remember deferring payments for social security! I am self-employed but my wife is employed and we don't remember deferring payments for her. Thank you all for the help!
The page to defer SS came up when you filed your self-employment return. It was a checkbox that you needed to check if you wanted to defer. If you agreed to defer, then you need to pay that deferred amount.
It could have been on the Sch SE if you were self employed and/or the Sch H if you had household employees. These are the screens you would have seen for the Sch C path ...
The CARES Act allows you to defer paying part of the Social Security tax for your household employee, if certain requirements are met. The deferral appears as a refundable credit on Schedule 3 line 12e. It was subtracted from the tax you had to pay with your tax return. Half the deferred tax is due December 31, 2021, and the remainder is due December 31, 2022. The deferral is only allowed for 2020.
The IRS letter is about the self-employment tax on your tax return, not Social Security tax that is withheld from your wife's pay by her employer. If any of her Social Security tax was deferred, it was done by her employer, not by you. If the employer deferred any of the Social Security tax, the employer will collect the deferred tax in 2021.
See the following IRS notice for instructions to pay the deferred tax for your household employee.
How self-employed individuals and household employers repay deferred Social Security tax
look at schedule SE part III. I think Turbotax did a very poor job of informing taxpayers with self-employment tax how answering certain questions would affect their taxes. without realizing it you probably requested that a portion of your SE tax not be paid with the 2020 return but rather 50% of the deferral be paid by 12/31/2021 and the other 1/2 by 12/31/2022
So schedule SE Part III line 26 is the total owed? I did not even realize that it was filled out like that. They did a very poor job.
@sill wrote:
So schedule SE Part III line 26 is the total owed?
No. Schedule 3 line 12e is the total amount owed. Half of it is due December 31, 2021, and the remainder is due December 31, 2022. Schedule 3 line 12e might not be the same as Schedule SE line 26.
See my other post with the 5 screenshots that explained the deferral option that you had to agree to ... this was something brand new for 2020 only so the user is responsible for reading the information presented. If you had questions then asking them before you file would have been the correct thing to do in a DIY program. And reviewing the entire return for accuracy is also the user's obligation when using a DIY program since it is reliant on the user's entries.
I personally read everything and clearly remember answering the question saying I did NOT want to defer. Turbotax apparently did it without letting me know. I followed all the screenshots shared in this chat, my summary of credits and deductions does not show any amount being deferred. And when I completed my taxes and printed them, TurboTax did not say anything about an amount still being due by the end of the year. THAT is a mistake on Turbax's part and I am disappointed to say the least. Not only that, but the IRS letter states that we should find the deferral amount on our Schedule SE. TurboTax shows it on a completely different form, Schedule III. Why is that?
@JanSal I don't know what the IRS letter says about Schedule SE, or why it even refers to Schedule SE. Schedule SE line 26 is a cap on the amount of tax that you might be able to defer, but you might not be able to defer that full amount. The amount that you can actually defer is calculated on a worksheet. The amount that you actually did defer is on Schedule 3 line 12e. TurboTax shows it on that line because that's where the IRS instructions say to put it.
Thank you. That does help explain it.
I guess my one suggestion for Turbo Tax would be that when taxes are deferred, TurboTax should put that on the summary page that is always printed before the rest of the return is printed. Mine shows that I paid everything and doesn't say anything about the deferral.
I just wish TurboTax did not automatically defer. I specifically said I didn't want to defer, and it still does not show an amount as being deferred in my TurboTax summary of Deductions and Credits. However, now that my TurboTax updated, it does say that the deferral "needs to be revisited." So now I know that when it says that, TurboTax has done something that I need to review to be sure it isn't doing something that I didn't want.
Thanks for helping clarify things and for help locating what actually happened inside TurboTax.
Ok, let's cut to the chase. I also received the mysterious IRS letter declaring that I had $230 deferred from my SE tax. I also did not authorize making a deferral of "employer portion of FICA", as I am self employed and have no employees. (I seriously doubt that the option was explained and made clear, it it was offered at all.) The current updates of the package do not operate the same as they did in April when I filed.
However, it is clear to me that Intuit and TurboTax have made a serious error in calculation of my taxes, specifically regarding SE deferral. Please note the following:
1. I filed my taxes in April. I save the return as it was filed, both in .pdf format and the native TT .tax2020 format.
2. Line 12e of Schedule 3, as filed, reads $632.
3. As of 08/27/2021, after software update Line 12e of Schedule 3, reads, $0. (ie no deferral calculated, same .tax2020 file). Apparently I did not request deferral after all!
4. Furthermore, while my letter from the IRS states that my deferral was for $230. Nowhere in my return is there line that contains a value of $230. This part of the mystery is truly confusing as the amounts do not correspond to anything on my return, regardless of whether I "elected" for deferral or not.
Regardless, it is clear that TT has changed their software to operated diferrently when calculating deferrals for SE taxes. The result is that my tax estimate for 2021 is incorrect, and other parts of the return are also incorrect. And I still have a pending expectation from the IRS that I will "pay the deferred amount".
I would like Intuit to acknowledge their error and acknowedge that they have not done or said anything to advise users who have been mislead by their errors.
I would also like guidance as to how I should respond. Do I send the IRS the ($230) amount stipulated in their letter, or should it be that the amount on Line 12e of Schedule 3 of my filed return ($632)? Or, do I submit an amended return, recalculate my outstanding SE vouchers, and wait for a response? Or just amend the return and ignore the letter?
I have been relying on TT for Many years. Can I trust them going forward?
I agree with this. I did not defer payments; I would have noticed if I had as I am very in tune with what I am doing when working on my taxes. TurboTax obviously deferred them on my behalf or disguised them without my knowledge. I am beginning to think this was done on purpose by TT with ulterior motives.
I did not see this deferral screen. TT must have deferred the payments on my behalf as I would have 100% noticed the screen had I deferred payments. I don't just go over my taxes once, but I work on them multiple days, revisiting each screen multiple times and confirming the information.
There is something going on here that I am not sure about but I am going to investigate.
Thanks for your help,
So, the amount on Schedule SE line 26 is what I need to pay?
or the on Schedule 3 line 12e?
I really don't want to mess with the IRS If I have to pay I will pay what is due this Dec and what is due on 2022...
Regards!
The amount on Schedule 3 line 12e is what you have to pay. Half is due by December 31, 2021, and the other half by December 31, 2022. You can, of course, pay earlier if you choose.
Here is a link to the IRS instructions for paying the deferred tax.
How self-employed individuals and household employers repay deferred Social Security tax
Sorry Sill, but you're clearly incorrect. TT did NOT force you to defer. You simply were not paying close enough attention.
This is one of the dangers of DIY. While TT is an excellent DIY product, you still either need to know what you're doing, or pay really close attention 100% of the time and seek help through research anytime you're unfamiliar with an issue. I say this from a professional perspective, having been a CPA for over 40 years and most of those years spent specializing in individual income tax advice and preparation.
This was a never before opportunity to defer some of these taxes and was brought into the law due to the unusual once in a 100-year pandemic. TT didn't force this on you. You either chose it willingly, or unwittingly.
Exactly what ulterior motives could you possibly attribute to TT/Intuit? I know conspiracy theories are all the rage, but this one is a non-starter.
The good news, while you actually owe these taxes, you were granted an interest-fee/penalty-free extension of time to pay the deferred portion. Just follow the rules in paying them and you'll be fine, apart from this coming as an unpleasant surprise. The bottom line though is you always owed these taxes and are now in need of dealing with the payment.
Sorry JanSal, but this is blatantly untrue. How do I know? Apart from being a CPA, who does this for others for a living (on a much more sophisticated software platform through my office, but use TT for my personal taxes at home), in doing my own tax return at home on TT/Intuit I prepared two versions of my 2020 return, one with and one without the deferral of the SE tax, so I know the impact. Accordingly, it was possible to have the TT platform prepare everyone's returns BOTH ways to see how much could be deferred, should they choose to do so.
I too just received an email from TT saying I had opted to defer our payment. I never saw anything regarding this when I did our taxes. It especially is a surprise since we were due a refund which we haven't even received yet. Doesn't make a whole lot of sense to me.
"we were due a refund which we haven't even received yet."
If you got the refund, you probably would have spent it.
Now when the refund comes, it will pay for the tax you are sending by the Dec 31 deadline(s),
since that amount was added to your refund.
If you're like me you have to dig into savings because of no IRS refund yet.
If no savings you can ask for an installment payment plan.
I did NOT state that TurboTax 'forced' me to defer, I stated that I was not given the option to choose.
I have done DIY taxes for 20 years without any issues while owning 2 businesses and freelancing. I do not appreciate your assumptions about my tax preparation skills and my attention to detail. I understand you may have been a CPA for 40 years, but you don't know me or my skills and abilities.
Who said anything about conspiracy theories? I stated there was something going on, could be a software glitch, could be a complete lack of transparency, could be something going on behind the scenes. Big companies have always operated ethically and with their customer's needs in mind, haven't they?
The bottom line is that I am going to pay what I owe but I am obviously not the only one with this issue and there is something happening that shouldn't be.
What's with all the assumptions on this board? Not helpful at all. How do you know they wouldn't have saved the refund or invested?
You're demonstrably upset. Semantics, perhaps. Not giving you a choice, is tantamount to forcing you.
You were given a choice. You just didn't follow the instructions well enough.
I'll grant you that possibly the instructions, or pathway the Easy-Step led you down, were not as clear as it could have been. I don't know, because I handled it both ways to understand the full impact of paying vs. deferring. Unlike you, I had no issue identifying how to run the scenario both ways.
This was a unique situation, a decision that was offered for the first time based on rules made as a reaction to Covid. That lack of past history I am sure hurt the non-professionals. No matter how many years someone has been a DIY preparer, it doesn't make them an expert and a non-professional could be blindsided when there is a unique change like this one.
Closer attention than ever needed to be paid. Clearly you want someone to blame, other than yourself.