How to pay self-employment tax in TurboTax Self-Employed Online if we have a partnership LLC (husband & wife filing jointly)?

[varez80]

Wife and I have a 50-50 partnership LLC, filed form 1065, and entered the generated schedule K-1 in the TurboTax Self-Employed Online, but have no clue how to enter the self-employment taxes that I owe i.e., schedule SE. (Saying "I" because wife did not materially participate; when adding the K-1s this came up and I'm sure that this part is filled out right.)

When trying to break down the taxes owed/refunded indicator, it shows a couple thousand at "W-2 withholdings" but that doesn't say much and I want to make sure instead of getting hit with a penalty months (years?) later.

Update: Forgot to mention that initially I added all LLC income to "Self-employment income and expenses" AND filed the form 1065 with the same amount as profits. A call from a TurboTax associate told me that I'm basically double-taxing ourselves as the self-employment income has already been reported as profits on the 1065. So now I'm clueless how to file our federal taxes...

[DianeW777 · Accepted solution]

When self employment is involved, material participation is considered evident for the activity. Self employment income must be shown on Line 14, of the Schedule K-1.  If this line is completed in the K-1 entry then the self employment tax should follow through in TurboTax.

The self employment net profit is first allowed to be reduced for 7.65% (1.0 - .0765 = .9235), this is then multiplied by the net profit to arrive at the amount subject to self employment tax ($500 x .9235= $462). The balance is taxed as follows:

• $462 x 12.4% for social security tax = $57.28
• $462 x 2.9% for medicare tax = $13.40
• IRS Self Employment Tax

Preview your tax return and check Schedule 2, line 4 to see the self employment tax. You can Preview My 1040 (TurboTax Online) or Select Forms  (TurboTax CD/Download), 

For TurboTax Online use the steps below.

1. Open or continue your return.
2. With the Tax Tools menu open, you can then:
   • View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu.
3. Scroll to Schedule 2.

[varez80]

Thank you so much! Your answer is one of the very few online answers where every single sentence is relevant and enlightening, without a modicum of nonsense. Deeply appreciate your time and wishing you a wonderful day!