topic Delete a Schedule: No need to file Schd SE & pay SE taxes in Canada in Get your taxes done using TurboTax

Delete a Schedule: No need to file Schd SE & pay SE taxes in Canada

PJB2020 — Thu, 01 Apr 2021 01:11:09 GMT

I am a self-employed Expat living in Canada. Canada & USA have a tax treaty so I do not need to complete Schedule SE. Turbotax automatically generates & populates the form & applies taxes that are not covered under F2555 Foreign Earned Income Exclusion. IRS instructions recommend not filing Schd SE & adding a note to Line 4 on Schd 2 referencing the tax treaty & exemption to SE taxes. The Windows software, however, will not let me delete the schedule. Any thoughts or suggestions?

Re: Delete a Schedule: No need to file Schd SE & pay SE taxes in Canada

SundayInSalem — Fri, 02 Apr 2021 01:10:31 GMT

TurboTax allows you to remove self-employment tax from your tax return.

Step 1: Remove Schedule SE

On the PERSONNAL tab, choose Other Tax Situations
Scroll down to Business taxes
Select Self-Employment tax
Choose Make Adjustments
Enter your net self-employment income as a negative amount

This removes self-employment tax and the deductible part of self-employment tax from Form 1040. However you still need to adjust Form 2555 to remove the S/E tax adjustment.

Step 2: Remove S/E adjustment from Form 2555

Click on the PERSONAL tab
Select Personal Income
Scroll down to Less Common Income
Update Foreign Earned Income Exclusion
Keep going until you see Deductions Related to Your Foreign Earned Income
Remove your Self-Employment tax adjustment

Attach a copy of the statement to Form 1040 or Form 1040-SR from the appropriate agency
of the foreign country verifying that your self-employment income is subject to social security coverage in that country. Enter “Exempt, see attached statement” on Schedule 2 (Form 1040), line 4.

Re: Delete a Schedule: No need to file Schd SE & pay SE taxes in Canada

PJB2020 — Fri, 02 Apr 2021 14:00:05 GMT

Thank you for the excellent response to my question. I have an added twist to this matter -- I prefer using the Forms format for data entry and I am also trying to amend my 2019 tax return. I am now having trouble adding a statement to line 4 of Schedule 2. I cannot override the info fields to add a statement about SE exemption.

Re: Delete a Schedule: No need to file Schd SE & pay SE taxes in Canada

SundayInSalem — Sat, 03 Apr 2021 23:51:07 GMT

You may have to hand write it. You will not able to e-file. The IRS says write “Exempt, see attached statement” on Schedule 2 (Form 1040), line 4. There's no way to override and put any explanation on that line.

Re: Delete a Schedule: No need to file Schd SE & pay SE taxes in Canada

ABCDEFG3 — Fri, 11 Jun 2021 09:59:17 GMT

wow! THANK YOU SO MUCH! I've been trying to figure this out for days and was about to switch to another tax software after 20+ years on turbotax. Very VERY grateful. Thank you!