Hi, I've TurboTax Premier and have a question about standard deduction when I will be claimed by my parents. How do I talk to a live CPA?

[tom01]

When someone else can claim me on their tax return, TurboTax Premier is showing that my standard deduction for single is still 12,000.  However, it appears that my tax due did not take this standard deduction into consideration.  

I understand that for 2018, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,050.  What confused me is the Deductions summary page, as well as the Standard Deduction Work Sheet, are both showing my standard deduction as $12,000, even though I reported (entered) that my earned income is greater than $700 on the Standard Deduction Work Sheet..   Is there a bug in TurboTax Premier and I should ignore this?  Or was this my fault for choosing my 1099Misc income as Qualified versus non-qualified income?  Thank you.

[bluedeb]

Since you are claimed by your parents your standard deduction would not be $12,000. 

• For 2018, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,050 or the sum of $350 and the individual’s earned income.

How do I connect with a tax expert in TurboTax Live?

https://ttlc.intuit.com/replies/6382274

[VolvoGirl]

That sentence seems to be confusing people.  It means you get either 1,050 or your earned income + 350 whichever is greater (up to the max of 12,000).  So the $1,050 is really the minimum amount you get.

[tom01]

If true, why does TurboTax show that I have $12,000 standard deduction on both the Deductions summary page and Standard Deduction Work Sheet, but did not deduct this amount (12,000) from my total wage?  It is showing that I have to pay taxes on my total wage minus about $1050 only?  Overall, I am confused.  The owe tax owe is much more than I expected, as if if doesn't use the $12,000 standard deduction (as it says it would use).  What am I doing wrongg?  I have TurboTax Premier 2018.

[VolvoGirl]

So what is on 1040 line 8?  How much is your earned income?

[tom01]

Ouch.
Line 8 Std Ded is .............  12,000
Line 7 AGI  is ..............       15.,200
Line 10 Taxable Income is    2,800.   
Line 14 Other Taxes .is ......  2,032
  (Line 14 is Self Employment tax? $14.4K from 1099MisISC. But this is already in AGI, No?)
Line 15 Tax is .....................  2,200 (not sure why so high).

In sunnmary:
Wage       15.2k
Std Ded   12k
.. AGI         3.5k  
... Tax Due  1.7k  (Why so much?) (which is shown by TurboTax).
..... (This is about 50% of AGI.  Doesn't sound right.  Ouch Ouch)

[VolvoGirl]

Better check lines 11-14 and check schedule 2 for other tax.   And anything on line  9?  Because
Line 7-8=3,200 not 2,800.

[tom01]

Okay. Thanks!  I think the issue is my 1099-MISC income.  TurboTax Premier wants me to complete Schedule C which is confusing.  Is there anyway to just add the 1099-MISC income to my AGI without filling out Schedule C., which is confusing  (It was a consulting work with no expense deduction).  I plan to call TurboTax support tomorrow.  If no resolution, I may have to get professional CPA help, and return my TurboTax Premier.  (It should be really simple, but somehow entering the 1099-MISC in TurboTax is difficult and confusing).

[VolvoGirl]

That sounds like self employment income and you have to fill out schedule C.  Sorry.  You can enter Self Employment Income into Online Deluxe or Premier but if you have any expenses you will have to upgrade to the Self Employed version.

How to enter income from Self Employment
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/2903027-how-do-i-report-income-from-self-employment">https://ttlc....>

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on 1040 Schedule 1 line 27.   The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 Schedule 4 line 57 which goes to 1040 line 14.  The SE tax is in addition to your regular income tax on the net profit.

[tom01]

That is exactly what TurboTax Premier did for me.  It completed Schedule SE as you stated.  However, filling out Schedule C is confusing with business name, accounting, qualify versus non-qualified, etc.  I merely and simply consulted fora company who paid me with a check and sent me a 1099-MISC.  For my service to the company, I have no business expenses to deduct.  

[VolvoGirl]

For self employment income.   You need to report all your income even if you don't get a 1099Misc. You use your own records.  You are considered self employed and have to fill out a schedule C for business income.   You use your own name, address and ssn or business name and EIN if you have one.   You should say you use the Cash Accounting Method and all income is At Risk.   

[tom01]

Thanks for clarification.  How do I answer the Qualified versus Non-Qualified question when filling out Schedule C.  (I'm afraid of doing this incorrectly).

[tom01]

Thanks for clarification.  How do I answer the Qualified versus Non-Qualified question when filling out Schedule C.  (I'm afraid of doing this incorrectly).

[VolvoGirl]

Sorry I don't know that question in schedule C.

[tom01]

Sorry, to clarify, I meant under "Qualified Business Income Deduction Info", the question was:
Schedule C: Qualified business income - yes or no.  Question "A". Is the activity a qualified trade or business?  I presume YES, (Even though I have no expense deduction for my service to receive this 1099-MISC).
.