You didn't do anything wrong; you were just following the instructions in TurboTax. If you have a payroll company prepare the Schedule H and pay the taxes on your behalf and file the related 940/941 returns, then as you pointed out, you do not need to enter it on your Form 1040. The payroll company has already taken care of the tax payments and reporting for you. If you don't take care of the tax payments and payroll reporting through the payroll service, you need to complete the Schedule H when you file your personal tax return.
A lot of taxpayers do not use a payroll service or the payroll service does not file the payroll tax forms; they have to enter the Schedule H on their tax return and pay the associated taxes. You were just trying to do everything correctly and doubled up the entries. But, it is better to do it twice rather than not at all (which a lot of taxpayers do that too).
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