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CPENG530
Returning Member

Why a half of self employment tax dedcution is not automatically applied on my return

As a sole proprietor, I think I am able to deduct 50% of your self-employment tax and on many discussion it said TurboTax will be done automatically when we complete enter income and expenses for Schedule C (your business). However, it didn't apply 50% of that self-employment tax on my draft return. How could I fix it up? Is there any TurboTax expert helping me out for this issue? I have to provide my final 2019 federal tax return for applying a senior center. Much appreciate if some body can respond to my question asap.

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2 Replies
MayaD
Expert Alumni

Why a half of self employment tax dedcution is not automatically applied on my return

The deductible 50% of SE tax is an adjustment to Income (reduces your Income) and it is reported on Schedule 1 part II line 14. It will be included in line 8a of your 1040 form.

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Why a half of self employment tax dedcution is not automatically applied on my return

You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 14 which flows to 1040 line 8a.  Turbo Tax automatically calculates the SE Tax and Adjustment.  If it is a small amount it may not make much difference in your tax.  It only reduces your taxable income and regular income tax.  It will not reduce your schedule C Net Profit or reduce the total self employment tax.  

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