Exclusion of Self Employment Tax (Sch SE) on Foreign Self Employment Income (Tax Treaty)

[jetlife2]

Hello

I am resident in France and have self employment income (Schedule C). This is covered under the totalization agreement with France, as social security taxes are already being paid to France. For this situation no US SE tax is required, and the IRS requires that you write "Exempt see attached statement" on Schedule 2 line 4, and attach the statement provided by the foreign country showing that social security taxes are paid to France.

In TT Premier desktop (the version that I have) there is a worksheet for exemptions to Schedule SE (Sch SE Adjustments Worksheet) that almost accomplishes this, but only for Clergy, so it puts Exempt 4209 on Sch 2.

Is there a way to accomplish in TT ? Does the Home and Business version provided a different option?

Thanks

[rjs]

TurboTax does not completely handle this situation. The only way to do it is to write the notation on Schedule 2 line 4 by hand after you print your tax return. See the following FAQ for instructions to have TurboTax remove the self-employment tax without putting anything on Schedule 2 line 4.

How do I pay zero Social Security (SS) taxes due to a totalization agreement?

Since you have removed the self-employment tax, you might not have any other entries on Schedule 2, in which case it will not be included in your tax return. If that happens, open Schedule 2 in forms mode, print a blank copy, and write the notation on it. Include it in your tax return after Schedule 1, or after Form 1040 if you do not have Schedule 1.

It would be the same in Home & Business.

[jetlife2]

Hello

In TT 2024 is this still the same process? With this process as described in the link, efiling is not possible. If I could put the "Exempt" text on Sch 2 I could still efile.

Thanks

[rjs]

@jetlife2 It appears to still be the same for 2024.