Social Security Over Withholding between 2 W2s and SE income and how to correct

[klw085]

My wife has three sources of income.  Two W2s and a shared sole proprietor business that we split into two Schedule Cs, one for me and one for her.

From a single W2 she already hit the cap for Social Security taxes this year, having had 8853.60 withheld.  Her second W2 withheld around 140 dollars for SS.  Turbotax is telling me that I should ask for a refund from her second employer and get an amended W2.  That sounds like a lot of hassle and it seems like I can just ask for a 140 dollar credit on Schedule 3 Line #11.  I'm assuming this is ok.

My main issue though is the sole proprietorship.  She has a fair amount of income there on her Schedule C and Turbotax uses a separate Schedule SE for her portion of our business to calculate SE tax.  I know some of it is Medicare, but I'm guessing some of it is additional Social Security tax.  I can't tell how to separate the additional SS tax from her Medicare tax.  If I could figure out her additional SS tax from our sole proprietorship I would ask for that as a credit on Schedule 3 Line #11 as well?

Thanks in advance

[klw085]

OK, I think I have figured things out a little more.  I think Turbotax is correct in that it is not adding additional SS tax to my wife's SE income.

That said, I am not allowed to go into Schedule 3 Line 11 and ask for a credit for the 140 dollars overwithheld.  At least, I haven't been able to find it either under the guided section and even when I go into forms themselves, Turbotax for some reason isn't allowing me to manually add this in.

Looking at other comments, it would appear that the IRS and Turbotax are now disallowing this workaround process and is instead asking for corrected W2s and refunds to be issued by the employer even though my wife's employers have separate EINs?  If so then why even have this line on the tax form asking for overwithheld SS amounts?

[VolvoGirl]

She should be getting the 140 back on Schedule 3 line 11 as excess Social Security.  What amounts are in boxes 3 & 4?  It must think 140 is too much based on box 3.  Box 4 should be Box 3 x .062.  And try leaving the cents of box 4 on both W2.

Also make sure her W2s are both assigned to her.  Maybe one got under your name.  Try deleting the second W2 and re enter it.  That usually clears something out.

Then we can visit the self employment part.

[VolvoGirl]

For the self employment tax on the Schedule C Net Profit.  

The SE tax includes what you already paid in from your W2s so your schedule SE tax will only be the difference up to the max amount of $8,853.60 for social security. The max income for social security for 2021 is $142,800 between W2 wages and the schedule C Net Profit.  There is no max for the Medicare tax.

Schedule SE Line 7 is the prefilled max amount subject to Social Security Tax.  If your total W2 and SE income is more than that you don't pay SS tax on the amount over $142,800.  If your income is less then box 7 doesn't figure into it.

See the blank Schedule SE line 7

https://www.irs.gov/pub/irs-pdf/f1040sse.pdf