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How do I fill out part 3 of 1040 schedule self employment tax deferral line 18?

What is the maximum self employment tax deferral?
7 Replies

How do I fill out part 3 of 1040 schedule self employment tax deferral line 18?

Here are the SE instructions :  https://www.irs.gov/instructions/i1040sse

 

 

Line 18

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.

How do I fill out part 3 of 1040 schedule self employment tax deferral line 18?

The maximum deferral is 50 percent of the Social Security tax imposed under section 1401(a) of the Internal Revenue Code on net earnings from self-employment income for the period beginning on March 27, 2020 and ending December 31, 2020.

 

You can learn more here:

 

Deferral of employment tax

MGTK
Returning Member

How do I fill out part 3 of 1040 schedule self employment tax deferral line 18?

If I do not wish to defer taxes, do I simply report $0 for line 18?

MGTK
Returning Member

How do I fill out part 3 of 1040 schedule self employment tax deferral line 18?

Or should it be $0 on Schedule 3 (1040) 12e, or both?

mrs_514
New Member

How do I fill out part 3 of 1040 schedule self employment tax deferral line 18?

I would like to know this as well. I entered $0 based on other community responses and just filed, but I'm wondering if there was a more correct way to do this.

cr70
New Member

How do I fill out part 3 of 1040 schedule self employment tax deferral line 18?

On part 3 line 18 of form SE maximum deferral of self employment tax payments, does that mean if the client made est. tax pymts?  Or does that mean client can defer paying self employment tax? Or can I put down 0 if client does not want to defer paying self employment tax. Thank you

KathrynG3
Expert Alumni

How do I fill out part 3 of 1040 schedule self employment tax deferral line 18?

No, it is not referring to estimated tax payments.

Yes, it is a calculation for deferring a portion of the self-employment tax. 

This issue is happening because you were initially eligible to defer self-employment tax due to a tax balance due, but are no longer eligible due to being eligible for a refund.

 

Yes, try entering nothing at all and running the review again.

Next, try entering 0 and running the review again.

If this does not clear the error, try:

  1. Delete the Sch SE that applies--(Sch SE-T is for Taxpayer, Sch SE-S for Spouse)--by following these steps:
    1. From the left menu, select Tax Tools.
    2. Select Tools.
    3. Scroll to Delete a Form.
    4. Scroll to Sch SE-T and/or Sch SE-S and select Delete, and Delete Selected Form and Continue.
  2. Return to the self-employment income & expenses interview in the Income & Expenses section and select Edit/Add.
    1. Select Edit for your business.
    2. Scroll down to Done so that the Sch SE is recalculated. 
    3. Finish any other questions in the self-employment interview and click Continue.
  3. Review the return again.

If this does not clear the error, then click this link for more information: 

Workaround for Sch SE-T error for deferring Self-Employment Taxes.

 

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