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Help with clarifying the Earned Income section for inputting the correct 2019 Earned Income

I am using Turbo Tax Home and Business for 2020 and currently working under: Personal > Deductions and Credits > You and Your Family > Earned Income Credit. 

The instructions for where to find my "Earned Income" from which I have researched is different from my AGI.  The "help instructions" state as follows:

 

"Generally, earned income includes wages (including non-taxable combat pay), tips, and other payments received for services you personally performed.

This usually includes the total of the amounts reported on:

- Form 1040, line 7 (Wages, salaries and tips)
- Schedule C, 1040 line 12 (net business income)
- Schedule F, 1040 line 18 (net farm income)"

 

Although, when I look at my 2019 return from Turbo Tax Home and Business 2019 it only gives me:

Form 1040 lines 7a and 7b. Both of which are the same numbers and considerably smaller due to business expenses.

Schedule C 1040 (Profit and Loss from Business) line 12 only shows "Depletion" not net business income.

I do not have farm income so that does not apply.

 

However, Schedule C 1040 (Profit and Loss from Business) line 7 shows "Gross Income" which is significantly larger as that was before my operating costs.

 

Clearly I would prefer to use my Gross Income line 7 from my Schedule C 1040 In lieu of my Other income from Schedule 1, line 9  from lines 7a or 7b.  As using my Gross Income Line 7 from the Schedule C 1040 nearly doubles my amount for my return.

 

I feel that Turbo Tax should be either more precise with their instructions or show visual Jon Doe example(s).  

 

This is all that is holding me up from finishing my taxes any qualified help would be greatly appreciated!

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2 Replies

Help with clarifying the Earned Income section for inputting the correct 2019 Earned Income

BAD INFO ....  Get the amounts from the 2019 form 1040  LINE 1 + Sch 1 lines 3 + 6 . 

Help with clarifying the Earned Income section for inputting the correct 2019 Earned Income

Here is what is currently in the program assistance link  which is not really complete either so use my instructions : 

 

Where can I find my 2019 earned income amount?

Depending on what forms are included with your 2019 tax return, there are three ways to find your earned income.

 

First, try looking for Form 8812. If you have it, find line 6A. This is your 2019 earned income.

 

If you don't have Form 8812, look for the Earned Income Tax Credit (EITC) Worksheets at the end of the tax return. If you have them, go to Worksheet A. Line 1 has your 2019 earned income.

 

If you don’t have Form 8812 or the EITC worksheets, the location of your earned income will depend on whether you were self-employed:

  • If you were NOT self employed, your earned income should be on line 1 of Form 1040.
  • If you were self-employed, follow these instructions to calculate your earned income:
    • Find your Schedule 1.
    • Subtract line 14 (under Adjustments) from line 3: (line 3 - line 14)
    • Add this number to line 1 of your 1040: (line 3 - line 14 + line 1 = earned income)

Note:  These are very uncommon but, if you have any of the following, you'll need to subtract those amounts from your total earned income:

  • Taxable scholarships not reported on Form W-2
  • Amounts received for work from a penal institution
  • Non-qualified plans shown in box 11 of your W-2
  • A Medicaid waiver payment that's excluded from income
 
 
 
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