I'm trying to file my daughter's taxes for free via turbotax. She is a Medical Transcriptionist and is considered to be a business owner rather than just an employee. This means that she has to pay 100% of the Social Security taxes but turbo tax is only having her pay 50% as an employee. She received a 1099-NEC which I have indicated in the filing so far. How do I get the 100% tax paid while using turbo tax? My daughter is a single parent with two young children and has a very low income. So far, with turbo tax she's getting a sizeable refund but would rather pay the whole tax debt now rather than have to cough up more money later on when she can't afford it.
If the tax return is generating a Schedule C, and it should, she will pay both sides of the tax, but then she (AND ALL SELF-EMPLOYED PERSONS) gets a credit for half the amount as a deduction.
This is because a business owner gets to claim the half they pay as an expense. So she pays both parts, but gets the business portion as a deduction.
The ENTIRE amount is credited to her Social Security Account.
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I've worried about that deduction for a couple of sleepless nights. Now you've provided an understandable explanation that has eluded me for awhile. IRS sure didn't explain it like that. Thank you so much.