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Level 1
posted Jun 1, 2019 12:17:38 PM

Unable to input self employment tax on foreign earned income

I am a US citizen living abroad and have less than $10k of foreign earned income for 2018. I pay only US Social Security taxes under a Totalization Agreement.

This year Turbo Tax will not allow me to calculate my Social Security payment on the SE form - it says that I do not qualify, despite the fact that the IRS states that I must pay "social security and Medicare tax on net earnings from self-employment of $400 or more a year".

I've tried to enter the information manually but am unable to make any inputs on the SE form. HELP!!!

0 12 1850
12 Replies
Expert Alumni
Jun 1, 2019 12:17:39 PM

Please make sure you entered your self-employment income and expenses on Schedule C and the gross profit in the Foreign Income Section of TurboTax. Then TurboTax should calculate the self-employment tax due.

Level 1
Jun 1, 2019 12:17:40 PM

I have never used Schedule C; I am a bona fide foreign resident and report my foreign income as General Category Income on form 2555

Expert Alumni
Jun 1, 2019 12:17:42 PM

OK, you had said self-employment in your question?

Level 1
Jun 1, 2019 12:17:44 PM

are you able to help me? do I need to submit the question again?

Expert Alumni
Jun 1, 2019 12:17:46 PM

Are you self-employed or work for foreign company?

Level 1
Jun 1, 2019 12:17:47 PM

I am a bona fide foreign resident who is self-employed. I pay US SS taxes under a Totalization Agreement. I must complete form SE with my gross earned income to calculate my payment.

Expert Alumni
Jun 1, 2019 12:17:48 PM

Thank you for your answer. Then you will have to enter your income on Schedule C and again in the foreign income section to qualify for the Foreign Earned income Exclusion. Then TurboTax will exclude your earned income from taxable income but still calculate the self-employment tax.

Level 1
Jun 1, 2019 12:17:48 PM

you just copied your first answer in again, which doesn't make sense in my case...

Employee Tax Expert
Jun 1, 2019 12:17:50 PM

The answer above, posted twice for your pleasure, is the correct answer. You must report your self-employment income on Schedule C. Schedule SE will then automatically populate. There is no other way to do it in TurboTax without overrides that will waive your accuracy guarantee. You will also be unable to e-file.

Level 1
Jun 1, 2019 12:17:52 PM

I was not required to complete Schedule C in prior years and was not directed by the TurboTax step-by-step system to do so; I think my confusion was justifiable. Now, however, after manually completing Schedule C, TurboTax has calculated a penalty for late payment of my Social Security contribution - any ideas on why that might be? Today is April 13th so I do not think the payment can be considered as late....?

Employee Tax Expert
Jun 1, 2019 12:17:53 PM

This is an unrelated question to the original question posted. Please post a separate question so that somebody can respond.

Level 1
Jun 1, 2019 12:17:56 PM

The answer provided was correct, but not helpful. I expected that a TurboTax representative would read all the information provided and be able to give a complete response as well as an explanation.