topic I have self-employment loss from my K-1 but line 18 on the Schedule SE requires a positive number and TT flags the number of zero being too high. What should I do? in Retirement tax questions

I have self-employment loss from my K-1 but line 18 on the Schedule SE requires a positive number and TT flags the number of zero being too high. What should I do?

rsevick — Sun, 28 Mar 2021 17:34:25 GMT

Re: I have self-employment loss from my K-1 but line 18 on the Schedule SE requires a positive nu...

DaveF1006 — Sun, 28 Mar 2021 18:46:03 GMT

It depends. Do you have more business income to report other than the loss on your K1? According to this IRS link, "If the total of your net earnings from self-employment from all businesses is $400 or more, use Schedule SE (Form 1040), Self-Employment Tax to figure your net earnings from self-employment and tax owed."

If you net earnings are less that $400, delete the SE form. If using Turbo Tax Online,

Go to tax tools>tools>delete a form>
Look for Schedule SE and delete.
If in the software, go to the forms mode and select Schedule SE. When it appears in the right-hand side of the screen, select delete form at the bottom.

Re: I have self-employment loss from my K-1 but line 18 on the Schedule SE requires a positive nu...

rsevick — Wed, 31 Mar 2021 14:17:45 GMT

Thank you. As a followup / clarifying question to your response:

I do not have anymore income to report. My wife and I file married. Is the net earnings from self-employment just for me or both of us? Our combined net earnings for both of us, from self-employment (wife from tutoring, me from Investment Club-K-1) is over $400 but Turbo Tax Premier edition included the Schedule SE (with my name at the top of the form) and this is where I'm having the problem. I have a 41 loss from self employment on my K-1 but the form Schedule SE requires a non-zero positive number on line 18 (something about deferral). I don't wish to deferral any of his loss.

This seems like a bug in the software but I could be wrong. I could wipe out the zero it put in this line 18 field and proceed with filing but it was flagged when the software reviewed my taxes so i want to fix it. Any further guidance? Thanks!!

Re: I have self-employment loss from my K-1 but line 18 on the Schedule SE requires a positive nu...

JamesG1 — Thu, 01 Apr 2021 14:44:08 GMT

There should be an IRS form SE for both you and your spouse.

In TurboTax Online Self-Employed, I was able to remove self-employment tax deferral and pass Review.

In some cases, you may need to add temporary income to your self-employment activity to generate a balance due and allow you to access the self-employment tax deferral questions. Follow these steps.

Down the left side of the screen, click on Federal.
Across the top of the screen, click on Deductions & credits.
Under Your tax breaks, scroll down to Self-employment tax deferral.
Click on Edit/Add to the right of Self-employment tax deferral.
At the screen Do you want more time to pay your self-employment tax?, click Yes.
At the screen Let's start by getting your eligible income, delete the dollar amount or change to $0.
Click on Continue.
At the screen Tell us how much you'd like to defer, delete the dollar amount or change to $0.Click Continue.
Click through Federal Review to make sure than the Review issue has been removed.
At the screen Some of your self-employment taxes may be eligible, click Skip.
Remove temporary income and Review.

The self-employment tax deferral is an optional benefit. It is also a deferral rather than forgiveness, so those amounts will eventually need to be repaid. Half of the deferred amount is due on December 31, 2021, and the other half is due on December 31, 2022.