topic how to report self-employment tax that was deferred in 2020 in Business & farm

how to report self-employment tax that was deferred in 2020

Yeroon — Thu, 25 Nov 2021 19:06:17 GMT

Where on my 2021 return do I enter payments of 2020 deferred self-employment tax?

Re: how to report self-employment tax that was deferred in 2020

Bsch4477 — Thu, 25 Nov 2021 19:13:10 GMT

You pay it separately.

https://www.irs.gov/newsroom/how-self-employed-individuals-and-household-employers-repay-deferred-social-security-tax

Re: how to report self-employment tax that was deferred in 2020

VolvoGirl — Thu, 25 Nov 2021 19:20:08 GMT

And you might not need to enter the payments you already made for 2020 into your 2021 return. Don't know if you can add the second half payment due to your 2021 return. Maybe.

Re: how to report self-employment tax that was deferred in 2020

Critter-3 — Thu, 25 Nov 2021 22:41:50 GMT

That section of the program is not fully functional right now but since you have until 12/31/2022 to make the second 1/2 payment I doubt there will be a line on the tax return ... use the link in the other answer to make the first & second payments whenever you wish up to the due dates.

Re: how to report self-employment tax that was deferred in 2020

Critter-3 — Thu, 25 Nov 2021 22:55:50 GMT

From the IRS link above :

How individuals can repay the deferred taxes

Individuals can pay the deferred amount any time on or before the due date. They:

Can make payments through the Electronic Federal Tax Payment System or by credit or debit card, money order or with a check.
Should be separate payments from other tax payments to ensure they are applied to the deferred tax balance on the tax year 2020 Form 1040 since IRS systems won't recognize the payment for deferred tax if it is with other tax payments or paid with the current Form 1040.
Should designate the payment as "deferred Social Security tax."

Individuals making deferred Social Security tax payments in EFTPS should select 1040 US Individual Income Tax Returns and deferred Social Security tax for the type of payment. They must apply the payment to the 2020 tax year where they deferred the payment. Taxpayers can visit EFTPS.gov for details.

Those using Direct Pay should select the reason for payment "balance due." If they are using the Card Program to pay with a debit or credit card, they should select "installment agreement." They should apply the payment to the 2020 tax year where the payment was deferred.

Re: how to report self-employment tax that was deferred in 2020

rjs — Fri, 26 Nov 2021 03:16:04 GMT

You do not enter the payments or the deferred tax anywhere on your 2021 tax return. You just pay it separately, as stated in the other replies above.

Re: how to report self-employment tax that was deferred in 2020

Yeroon — Sun, 28 Nov 2021 18:40:16 GMT

Agree, these payments are related to the 2020 tax return and are not entered on the 2021 or 2022 return.

Don't worry, the IRS will track your payments.

And as other replies emphasize, do label your payments correctly.

Thanks

Re: how to report self-employment tax that was deferred in 2020

Sludgey — Sat, 05 Mar 2022 15:38:14 GMT

Where on Turbotax 2021 do I report the payment made in 2021 for tax deferred in 2020

Re: how to report self-employment tax that was deferred in 2020

DoninGA — Sat, 05 Mar 2022 15:40:20 GMT

@Sludgey wrote:

Where on Turbotax 2021 do I report the payment made in 2021 for tax deferred in 2020

As previously stated on this thread -

You do not enter the payments or the deferred tax anywhere on your 2021 tax return. You just pay it separately, as stated in the other replies above.

Re: how to report self-employment tax that was deferred in 2020

RebeccaLChin — Mon, 17 Oct 2022 03:58:42 GMT

Wouldn't we want to show the payments made in 2021 for self employed for the 2020 deferred payroll tax because wouldn't it decrease our tax liability in 2021. I thought that half of these taxes were a deduction, but everyone is saying that there is no reason to document this payment in Turbo Tax.

Re: how to report self-employment tax that was deferred in 2020

rjs — Wed, 19 Oct 2022 01:36:36 GMT

@RebeccaLChin

It does not affect your 2021 tax liability. On your 2020 tax return you got a deduction for half of the full amount of self-employment tax, even if you deferred paying part of it. The deduction was calculated on the full amount before the deferral.

On your 2020 tax return the full amount of self-employment tax, before the deferral, is on Schedule SE line 12 and Schedule 2 line 4. The deduction for half of that amount is on Schedule SE line 13 and Schedule line 14. The amount that you deferred is on Schedule 3 line 12e.

Re: how to report self-employment tax that was deferred in 2020

Rebecca Chin — Wed, 19 Oct 2022 01:35:32 GMT

Great. Thanks!