form SE line 12

[OldCarGuy]

Ok -- now that the K1 correctly shows the SE income we come to problem #2 -- the 1040

the SE income now shows the correct income BUT when it shows up on form SE T is only lists non K1 income on the SE S shows the K1 income.  On line 7 and 9 the max SE is shown but line 6 non K1 income is so small line 10-11 are very small.  was there a change in tax rate that could explain this?  we are 75 and 66 years old, does that matter?   We made more money in 2020 than 2019 and yet our SE tax is only 10% of last year??

[JohnW152]

No, there was no tax rate change that would explain this, and your ages don’t matter as far as paying Self-Employment tax goes.

Is there a fairly large amount in line 8a, Total social security wages and tips (total of boxes 3 and 7 on Form(s) W-2) and railroad retirement (tier 1) compensation?  As that amount approaches the $142,800 limitation you refer to, you’ll owe less in SE taxes.

Did you actually have W-2 wages that were that high?

[OldCarGuy]

W2 wages very low <$10,000 but K1 income >$200,000

[JamesG1]

Do both of your partnership k-1’s include self-employment earnings in box 14?

Did last year’s k-1’s include self-employment earnings and this year’s does not?

I sounds like Form SE needs the self-employment earnings to compute a self-employment tax.

[OldCarGuy]

yes both K1 have SE earnings

yes last year the SE flowed through and this year NOT

Agree with your conclusion -- 

[OldCarGuy]

so do i manually enter the SE income?  any idea why its not bring in this income? 

[DaveF1006]

@OldCarGuy  Give me the details on your K1 and I will test it to see if there are anomalies. Let me know what type of K1, whether it be a partnership or S-Corp and whether you are a general partner or limited partner (If this was issued from a partnership).

[OldCarGuy]

details

K1 comes from Turbo tax business -- it's our company

Income shown on the K1 part -- Gen and H boxes ckd

form J shows beginning % share but does not show any ending share?

form L does not show any distributions 

Part 3 -- partner share: L1 shows income >$100,000 for each of us (my wife is the other partner)

L1 sec A shows the income and B indicates its passthrough 

L19 shows cash distributions ($95,000 each)  

the mystery is why is our SS tax only $1000 -- last year it was $10,000

[AliciaP1]

It would be helpful to have a TurboTax ".tax2021" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions: 

At the top menu in the black line at the top of the page go to Online. 

1. From the menu, select Send Tax File to Agent. 
2. You will see a message explaining what the diagnostic copy is.  Click Send and then you will get a Token number. 
3. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

[OldCarGuy]

token # 924988

thanks

[AliciaP1]

Box 14 on your K-1 entries (all 3) are blank.  This is where Partners' Self-Employed Income is shown.  If you have verified that your K-1 entries into your 1040 return are correct, then you do not owe self-employment tax on any of your partnership interests.

Self-employment income on a 1065 excludes the following income:

• Dividends on any shares of stock and interest on any bonds, debentures, notes, etc., unless the dividends or interest are received in the course of a trade or business, such as a dealer in stocks or securities or interest on notes or accounts receivable.

• Rentals from real estate, except rentals of real estate held for sale to customers in the course of a trade or business as a real estate dealer or payments for rooms or space when significant services are provided.

• Royalty income, except royalty income received in the course of a trade or business.

If your partnership reports income from sources other than these, there may be an error on the 1065 and the K-1s from that return.

Schedule SE-S shows the income from the Schedule C business.  The $1,000 tax is correct for that based on the entry to Schedule C.

@OldCarGuy