Schedule SE Max Deferral

[Howward]

I have a small business with a $175 loss. During Review the error analysis of my otherwise completed tax return is giving the error: "Sch SE-T Max deferral line 18 is too large". However, Line 18 of this form shows "0."  How is "0" too large? I've deleting the "0", but it comes back.  I've even tried deleting the business and re-entering it, but the same error pops up.

[CatinaT1]

To get past this screen so you can file your taxes, you need to update Schedule SE-T. 

  

The process: delete Sch SE-T, take a quick run through of the self-employment to recalculate Sch SE-T, and then turn off the Max Deferral. 

  

To do this in TurboTax, follow these steps: 

  

First, delete Sch SE-T that applies 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, select Delete, confirm the deletion. 

Next, to replace Sch SE-T, 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.  

Lastly, revisit the section for the Self-employment tax deferral entry: 

1. Return to the Deductions & Credits section. 

2. Scroll to Tax relief related to COVID-19 and Show More. 

3. Select Self-employment tax deferral and select Revisit. 

4. Answer Yes at the next screen to get back to Let's start by getting your eligible income. 

   1. If you do not want to defer any self-employment income, "Enter your eligible self-employment income" should be blank. 

      1. Select Continue. 

   2. At Tell us how much you'd like to defer, "Enter amount" should be blank. 

      1. Select Continue. 

5. Scroll down and select Wrap up Tax Breaks and Continue. 

6. Run through the Federal Review again. 

[Howward]

Catina,

Thanks for your response, but it unfortunately does not work. I deleted the form (though your specific instructions don't seem to relate to my copy of the software - there is no" left menu" in the forms view, but there is a Delete Form button bottom left of the form).  I edited my business and clicked "Continue". After answering "yes" to deferring income and checking my name (or both since my wife also has a business), I get the response "It looks like you're not eligible for this deferral. Since you're getting a refund this year, you're not eligible to defer the Social Security portion...". Then, after going through the next few screens, when I run the Federal Review I get no errors. However, when I rerun the final review, the same error pops up.
I'm beginning to think this is a bug in the software - after all, how can zero dollars be too large? And why can't I just delete it?

Unless there's some way to fix this, I'll try to file with the error.

Howard

[KathrynG3]

It is best to file error free. 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.

Since the error is persisting, then temporarily trigger a balance due by adding income long enough to decline the SE tax deferral option, then remove the extra income.

To do this in TurboTax, follow these steps:

Enter a temporary amount as income in the self-employment section that will result in you not having a refund.

1. From Step-by-Step, BUSINESS tab,  select Continue and I'll chose what I work on.
2. At Business Income and Expenses, select Update.
3. Continue through any questions until you are at Your Business.
4. Scroll to Business Income and select Update. 
5. At Business Income, select Start by Other Income and Continue.
6. At Other Income, under Description, enter Temp income to remove deferral and enter a large amount, such as $100,000 and Continue.

Decline to defer any self-employment tax.

1. Select the PERSONAL tab.
2. Click the second tab from the left, Deductions & Credits and I'll choose what I work on.
3. Scroll down to Tax Relief related to Covid-19 and select Self-employment tax deferral and Update.
4. Answer Yes at the next screen to get back to Let's start by getting your eligible income
   1. Enter any amount, such as 280/366ths of your income to reflect the income from March 27-December 31, 2021. 
      • This amount should be calculated and entered without the false added income, and will post to Line 18 of Sch SE
   1. Select Continue.
   1. At Tell us how much you'd like to defer, 
      • Enter 0.

Remove the temporary income.

1. Select the BUSINESS tab, Continue, and I'll choose what I work on.
2. At Business Income and Expenses, select Update.
3. At Here's the business info we have so far, select Delete next to the false added income.
4. Confirm the deletion by selecting Yes.
5. Now returned to Here's the business info we have so far, select Done.

Run the review again.

@Howward

[Howward]

Yeah, I tried that. Didn't work.

I agree that it's best to file error free, but I couldn't get rid of it. I even tried deleting and reentering the business.

My return is now filed.

I was frustrated by TurboTax this year. Not only did I have this error, but the return was rejected 3 times by the IRS for "2019 AGI not matching". However, I checked not only my records but with the IRS and the number was correct. I was finally able to have the return accepted by entering $0. for 2019 AGI.

These two errors cost me hours of time.

Maybe feed this upward through your chain of experts?