@SoCal-Guy-in-CA wrote:
Respectfully speaking (because I know how things can come off online sometimes) , neither of the two questions you provided were questions I asked. I also noticed I could have phrased my question better.
I should have said...
Yes, but when TurboTax calculates my Schedule C net income, it doesn't tell me which expense deductions can affect the earnings test for recipients of social security benefits. It's easy to say that TurboTax doesn't perform this function, but TurboTax does perform tax analysis related functions that determine how expensed deductions are affected by, or can affect, something else. It may just be that TurboTax can't do what I'm asking.
Seems like there is a way to have TurboTax do this. If a tax filer is reporting SSA benefits and there is net schedule C income that could be affected, a page could pop up explaining that certain allowable expenses in determining taxable income may not be allowable for the SSA earnings text (i.e., retirement contributions, wages paid to a family member, etc.). Just a suggestion.
The only thing I can find on the social security site is that your benefits may be reduced based on your "net income from self-employment." If there is some secret formula for calculating "net income from self-employment" that is different than line 31 of schedule C or line 3 of schedule SE, I don't know where to go to find that.
It would not be a Turbotax feature to warn you when your earnings exceed the limit and will cause your social security benefit to be reduced in the future--turbotax doesn't have any "tax planning" features and isn't designed to include anything not related to preparing a current year tax return.
If you want tax planning advice on how much you can earn before your benefits are reduced, and you think the social security administration uses some criteria other than "net income from self-employment", you may want to hire a professional tax planner.
I also don't understand what you are asking for in terms of your schedule C. You seem to want advice that certain items will affect your future social security benefit recalculation more than other items. But the position of the IRS (and therefore of Turbotax) is that you must correctly report your legitimate expenses. If you have an expense in a category that is harmful to your social security and you are preparing your tax return, you're stuck, it's too late to change it. You have to report it correctly, even if it is harmful to other parts of your financial picture. If you could legally tweak your expenses, it would have to be done before you incurred them, and that also gets into tax planning instead of tax reporting.
