Was computing taxes for my 2020 federal. I receive a 1099 NEC for a small payment for work I do associated with my job. Since it's from an exterior party this is how they choose to pay me. I do not have any business expenses and don't consider myself self employed so I entered this into the deluxe version under income (has a place for 1099 NEC). Anyway, unless the payment is in box 3 (which mine isn't) the 1099NEC requires that the payee pay self employment tax (social security isn't deducted) The program does not do this. Instead it simply adds it to your income without computing this tax on the necessary worksheets. The end result is that the taxes are computed wrong.
I would argue that unless someone has business expenses, that turbotax should be equipped to calculate their taxes due in the deluxe model. The business edition has way more resources than necessary and completing the self employment tax worksheets when no business expenses exist is a simple tax.
Outside of that, turbotax gave no notification that the taxes were computer wrong, that self employment tax was due, and it failed to flag my taxes for an error even though there was one. I'm fairly positive this has impacted other people in my position without their knowledge and resulted in improperly calculated taxes due. The error needs fixed.
On a side note, I was told to download the business edition, which I did. If you enter the income in the business section it works correctly, entered into personal income, it does not. Again this is an error. And again I would argue that the deluxe vs. should compute the proper tax for individuals who are not truly self employed and have no business expenses. I would like a refund on my upgrade, and for the deluxe version to calculate properly. At the absolute least, the flaw in the programming that allows the tax to be computed incorrectly needs repaired.
