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Deductions & credits
@ylevine wrote:
LLC was reported as a schedule C and the owner of the LLC was one of the tax payer of w2 tax payer that exceeded the income. Turbo Tax did not recognize that for this person the max of SS had been met.
There's a "we" in your question that concerns me. In most cases, an LLC with 2 or more members must report their taxes differently, and not on schedule C. This may need clarification.
I will assume here that "John" has a W-2 job with maximum social withholding; "Mary" has a W-2 job; and John has a single-member LLC filing as a disregarded entity on schedule C. The net profit from schedule C goes to schedule SE, but because John has already paid the maximum social security amount, John will pay 2.9% self-employment tax (Medicare only) instead of 15.3% self-employment tax.
If John is being assessed the full 15.3% SE tax, here are some things to check.
1. Did you create the schedule C under John's name? Make sure the schedule C and SE are under the name of the LLC owner and not the other spouse.
2. Did you enter the W-2s correctly, John under John's name and Mary under Mary's name?
If the LLC is mistakenly under Mary's name, or if both W-2s are mistakenly under Mary's name, the program won't recognize that John has paid the full SS withholding.
3. If you have not entered the W-2s yet, or not entered them correctly, John may be assessed SE tax, which will be recalculated if you enter John's W-2 later.