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Level 1

Why do I have tax liability if I have $0 taxable income?

I am self-employed. My deductions exceed my income. My Taxable Income is listed as 0% -- so why do I have a Tax Liability?
2 Replies
Level 20

Why do I have tax liability if I have $0 taxable income?

Review the entire return ... you may have zero taxable FEDERAL income however as a self employed person you will owe Self Employment taxes (FICA) among other possible taxes ...

 

 

You can peek at only the form 1040 & state summary page  by going here:

Click on Tax Tools >>>Tools >>>Click on View Tax Summary >>>Click on Preview my 1040

 

To view the entire return using the online editions before you file, you will need to pay for your online account.

To pay the TurboTax online account fees by credit card, without completing the 2017 return at this time, click on Tools … Then click on Print Center.  Then click on Print, save or preview this year's return.  On the next page, to pay by credit card, click Continue.  On the next screen it will ask if you want Audit Defense, if you do not want this option just click on the Continue button.  The next screen will ask for all your credit card information so you can pay for the account.

 

 

Level 20

Why do I have tax liability if I have $0 taxable income?

Even though you may not be subject to income tax because the standard deduction or Schedule A deductions and perhaps QBI deduction exceed your income, resulting in $0 of taxable income on Form 1040 line 10, you are still subject to self-employment taxes based on your net profit from self employment.  You might also be subject to other taxes on Schedule 4 that are not income taxes.