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jwbjt
New Member

Do I HAVE to defer my self employment taxes if I would rather pay the entire amount this year?

 
2 Replies
KathrynG3
Expert Alumni

Do I HAVE to defer my self employment taxes if I would rather pay the entire amount this year?

No, you do not have to defer any self-employment tax. If you are getting an error, it could be from considering the tax deferral, but after entering more details, getting into a refund situation. This would have made you ineligible. 

 

Go back to the interview section to correct these entries and un-trigger any deferral that you can no longer take and probably later declined. You will need to initially accept it before declining.

 

To do this in TurboTax, follow these steps:

 

Enter a temporary amount as income in the self-employment section that will result in you not having a refund.

  1. From the left menu, select Federal.
  2. From the Income & Expenses, scroll to Self-employment income & expenses and Edit/Add.
  3. At Your 2020 work summary, select Edit.
  4. Under INCOME, select Add income for this work.
  5. Add Other self-employed income, includes 1099-K, cash, and checks and Continue.
  6. At Type of income, enter Temp income to remove deferral and enter a large amount, such as $100,000 and Continue.

Decline to defer any self-employment tax.

  1. From the left menu, click on Federal.
  2. Click the second tab from the left, Deductions & Credits.
  3. Scroll down to Tax Relief related to Covid-19 and Revisit.
  4. Select Self-employment tax deferral and select Revisit.
  5. Answer Yes at the next screen to get back to Let's start by getting your eligible income.
     
  1. Enter 280/366ths of your income to reflect the income from March 27-December 31, 2021. 
    1. This amount should be the same as the correct amount on Line 18 of Sch SE.
  1. Select Continue.
  2. At Tell us how much you'd like to defer
    1. Enter 0.

Remove the temporary income.

  1. From the left menu, select Federal.
  2. From the Income & Expenses, scroll to Self-employment income & expenses and Edit/Add.
  3. At Your 2020 work summary, select Edit.
  4. Under INCOME, select the Trash can icon next to Temp income to remove deferral and Continue.

For more details, see TurboTax Expert @DawnC's answer here, about 2/3 down the page: Resolve Sch SE-T Max Deferral Line 18 must be entered.

 

@jwbjt

sraramos
Level 1

Do I HAVE to defer my self employment taxes if I would rather pay the entire amount this year?

I appreciate that this workaround allows me to choose not to defer my self-employment taxes, but a workaround requiring me to enter and then delete $100,000 of fake income on a product that I am paying $100 to work correctly with my correct information is foolish.  I am working online and at this point I may just print out blank forms from the IRS and file for free. 

 

Turbo Tax should own that this is a bug on their part and fix it.  I should be able to enter the accurate amount in box 18 on Schedule SE and then choose whether or not this proportion of my taxes is entered on my schedule 3 line 12e.  It has nothing to do with the order in which I completed the modules - the program specifically told me to wait until the deductions and credits section to address the self-employment tax deferral and I considered it in the order the deductions and credits were addressed by Turbo Tax.

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