topic 2022 Statutory Employee - W2 and self-employed section? in Deductions & credits

2022 Statutory Employee - W2 and self-employed section?

stephk1 — Tue, 24 Feb 2026 05:25:43 GMT

I am a statutory employee - seems like my income was listed twice though - in W2 and self-employment (which is where I entered my expenses). How do I ensure that I am not being charged for two separate incomes? Thanks! Also - I do have a separate position which is only in the self-employed area.

@MichaelG81

Re: Statutory Employee - W2 and self-employed section?

JohnB5677 — Tue, 11 Apr 2023 15:45:36 GMT

If you are a statutory employee there was an option to include the money on the schedule C. You should not have posted it to the Schedule C separately; it should have carried over.

The only way to know is to preview your tax return.

You can preview your tax return by going to:

On the menu bar on the left that shows.
1. My Info
2. Federal
3. State
4. Review
5. File
Select Tax Tools
On the drop-down select Tools
On the popup menu
Select View Tax Summary
On the left sidebar
Select Preview my 1040.
1. Line 1 should not include the statutory employee income.
2. Line 8 should include the business income.
3. Line 8 comes from Schedule 1 which also can be reviewed.
Schedules 1,2&3 are included if you scroll down past your 1040.
To return to the entry screens press Back on the sidebar.

Some key numbers on your 1040 tax return are:

Line 15 - Taxable Income

Line 24 - Total Tax.

Line 25 - Withholdings.

Line 33 - Payments including Credits.

Line 34 - Overpayments.

Line 37 - Tax owed.

If I've misunderstood your question, and this does not completely answer it, please contact us again and provide some additional details.

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Tue, 11 Apr 2023 15:54:36 GMT

Thank you very much. I will check. It does say that a Schedule C was created for that income..so I guess it's okay - but I will check the schedule C.

It just seems that my net income with the standard deduction should cause a tax expense of a few hundred lower than it shows I owe..

Thanks - I will look there. @JohnB5677

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Tue, 11 Apr 2023 17:12:59 GMT

Hi @JohnB5677

Again, thanks so much for your advice.

So, if after subtracting the standard deduction, the taxable income is zero, do I still owe because it's the SE tax?

thanks!

Re: Statutory Employee - W2 and self-employed section?

JohnB5677 — Tue, 11 Apr 2023 17:32:20 GMT

It is possible. the income tax calculation is on your total income including wages and Business. The standard deduction could bring your income tax to zero.

The profit from your business then goes through a second tier of taxes. That is the se tax. You already took your deductions against the business, there is no other standard deduction.

The self-employment tax rate is 15.3%. That rate is the sum of 12.4% for Social Security and 2.9% for Medicare.

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Tue, 11 Apr 2023 20:15:10 GMT

Hi @JohnB5677

My QBI deduction does not seem to have populated (not sure if that's the right way to put it...)

What can I do to ensure that is applied?

Thanks!!

Re: Statutory Employee - W2 and self-employed section?

DaveF1006 — Tue, 11 Apr 2023 21:24:24 GMT

QBI is generated automatically when you have self-employment income. It is reported on line 13 of your tax return. It is determined from the net income from your business. In this case, the income is the amount of W2 wages you received. Since you are a statutory employee, you are considered as having a business.

QBI is calculated by taking your Gross income - expenses - 1/2 deduction for your Self-employment earnings-any retirement or Health insurance deducted by the business. Whatever remains is multiplied by .2 to get the amount of your QBI.

If you had a net loss in the business, you would not receive any QBI. Check box 13 of the 1040 to see if QBI is listed there. If not, go back and review your entries in Schedule C and supply any information that is required.

Make sure also to check the Box on your W2 indicating you are a statutory employee. Once you check the box and finish the W2, there will be some follow questions for you to complete. Once these are complete,

Go to Federal > Income & Expenses>
Self employment>self-employment
You will see your profile started. Your income is already reported in the program as W2 income so you will need to finish out this section to claim your QBI.
After expenses are entered and you have a net profit after entering your expenses, the amount of the net profit is multiplied by .2 to determine your QBI.

@stephk1

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Tue, 11 Apr 2023 21:28:07 GMT

hi @DaveF1006

Thank you so much for your reply. I will check to make sure the statutory box is marked and follow the steps you outlined.

Thanks!

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Tue, 11 Apr 2023 22:04:25 GMT

@DaveF1006

Hi - So I completed the self-employment information (it was almost finished prior)..

And the QBI is still showing as 0..

Thanks for your continued help!

Re: Statutory Employee - W2 and self-employed section?

LindaS5247 — Tue, 11 Apr 2023 23:44:52 GMT

The deduction amount depends on the taxpayer's total taxable income, which includes wages, interest, capital gains (etc.) in addition to income generated by the business. Once the taxable income reaches or exceeds $170,050 ($340,100 if filing jointly), the type of business also comes into play.

At incomes below that level, the deduction is 20% of either taxable income (minus capital gains and dividends) or the QBI, whichever is less.

At higher income levels, the deduction is reduced or eliminated, depending on the nature of the business. The calculations also get quite complicated, but TurboTax easily handles them and will figure out how much of a deduction you’re entitled to.

For the purposes of the deduction, QBI is defined as net business income, excluding:

Income generated outside the United States
Investment income
W-2 compensation paid to an S corporation owner
Guaranteed payments to a partner
Income from REITs, publicly traded partnerships, and qualified cooperatives (these entities may qualify for a 20% deduction under a different set of rules, the explanation of which is beyond the scope of this FAQ).

This deduction applies to Schedule C filers (sole proprietorships and other self-employed businesses), LLCs, partnerships, S corporations, estates, and trusts. Certain rental enterprises may also qualify. Corporations are not eligible because they received their own tax breaks under the TCJA.

That said, not every eligible business automatically qualifies for the deduction. In particular, some types of service businesses (SSTBs) are disqualified once the taxable income on the return exceeds $220,050 ($440,100 if filing jointly).

Go to Federal > Income & Expenses>
Self employment>self-employment
You will see your profile started. Your income is already reported in the program as W2 income so you will need to finish out this section to claim your QBI.
After expenses are entered and you have a net profit after entering your expenses, the amount of the net profit is multiplied by .2 to determine your QBI.

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Wed, 12 Apr 2023 16:00:40 GMT

Thank you @LindaS5247

I did not have a loss

I am unable to see the schedule c report at all

and the QBI shows as 0

Not sure what I should do

The statutory box is checked

Thanks so much

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Wed, 12 Apr 2023 16:18:19 GMT

@LindaS5247

@DaveF1006 Is it because my AGI after the deduction is negative? Is that what you were indicating with it being a business loss?

Thanks!

Re: Statutory Employee - W2 and self-employed section?

LindaS5247 — Wed, 12 Apr 2023 16:19:07 GMT

You can preview your return using the following instructions to see if your income is being double counted and you can see your Schedule C. Did you check that?

As far as the QBI deduction did you read all of the eligibility/ineligibility requirements I listed? Not everyone gets it if you meet or do not meet some of the criteria.

You can view your entire return or just your 1040 form before you e-file using the following steps:

Sign in to your TurboTax account
Open or continue your return
Select Tax Tools from the menu (if you don't see this, select the menu icon in the upper-left corner)
With the Tax Tools menu open, you can then:
- Preview your entire return: Select Print Center and then Print, save or preview this year's return (you may be asked to register or pay first)
- View only your 1040 form: Select Tools. Next, select View Tax Summary in the pop-up, then Preview my 1040 in the left menu

You can preview your return in the TurboTax CD/Download software by following these steps:

With your return open in TurboTax, select Preview from the File menu at the top. (If you don't see "Preview," open your return, not just the program).
In the pop-up window, choose the set of forms you wish to see (all official forms, specific forms, etc.) and select Preview.
Scroll down to view all the forms if you chose to preview multiple forms.

I think take a look at the preview of your return and if this does not help please feel free to come back to TurboTax Community with additional details or questions or click here for information on Turbo Tax Support. You can connect with a Live TurboTax Agent and share your screen.

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Wed, 12 Apr 2023 16:23:52 GMT

@LindaS5247 when I subtract the earnings from the standard deduction - it is a negative # - so the taxable income is zero. Is that why I can't get the QBI deduction then? Is that what you meant by a loss?

Thanks!

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Wed, 12 Apr 2023 17:25:03 GMT

@LindaS5247 , @DaveF1006, @JohnB5677

Hi,

So, does it make sense that this year I earned 11k less than last year, but I owe about $100 more?

There are some credits that seem to not apply because my taxable income is zero (including that QBI)..

so - does this make sense? Last year my taxable income wasn't zero. This year, after the deduction, it is.

Also - why would I owe a penalty for not withholding during the year...I didn't do so last year and I don't believe I had to pay a penalty.

Thanks so much for your continued support. I am hoping to just wrap this up now - I thought about adding the live help - but if I could save that additional expense, that would certainly help.

Kind regards..

Re: Statutory Employee - W2 and self-employed section?

LindaS5247 — Wed, 12 Apr 2023 17:50:19 GMT

Yes, the reason you may not receive a full 20% of QBI deduction is because the overall deduction cannot exceed 20% of your taxable income after subtracting out capital gains.

Specifically, the IRS calculation for the penalty is based on the:

Total underpayment amount
Period when the underpayment was underpaid
Interest rate for underpayments (This number changes each quarter. View the IRS’ Interest on Underpayments and Overpayments page.)
Whatever your QBI deduction turns out to be, it can’t be more than 20% of your taxable income without the QBI deduction.

It's difficult to say why you got an underpayment of tax penalty without seeing your tax return and prior year tax return. I got one myself this year and it is the first time ever. I was not expecting it at all. A lot of the pandemic credits ended this year. That could have had some effect. Generally, most taxpayers will avoid this penalty if they either owe less than $1,000 in tax after subtracting their withholding and refundable credits, or if they paid withholding and estimated tax of at least 90% of the tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller.

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Wed, 12 Apr 2023 18:06:58 GMT

@LindaS5247

Thank you. So, just to confirm, having 0 for the QBI deduction and owing more than I did last year (even though I have earned 11k less) would essentially make sense in this case (because I have the 0 taxable income therefore receive fewer credits and breaks)?

Thanks again!

Re: Statutory Employee - W2 and self-employed section?

RobertB4444 — Wed, 12 Apr 2023 19:09:43 GMT

Yes, with zero taxable income your QBI deduction should also be zero. But the business income that was wiped out by your standard deduction is still subject to self-employment tax so owing a little more makes sense.

@stephk1

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Wed, 12 Apr 2023 19:18:55 GMT

@RobertB4444

Thank you!

Re: Statutory Employee - W2 and self-employed section?

stephk1 — Wed, 12 Apr 2023 19:27:33 GMT

@RobertB4444

would my 0 taxable income be the reason I am not getting the savers credit also? I have contributed to my 401k as a statutory employee.

Thanks!