cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

IRS sent a letter asking for a Schedule SE but I had a net loss of self employment income and SE says not to file if under 400.00

My return was accepted but 21 days passed without refund and I just got a letter asking for Schedule SE. I have both a Schedule C and a Schedule F on my return, the C reports a small profit but the F is reporting a net loss. The combined totals yield a negative number so why does the IRS think I need to pay self employment taxes?

1 Best answer

Accepted Solutions
Level 2

IRS sent a letter asking for a Schedule SE but I had a net loss of self employment income and SE says not to file if under 400.00

This is an issue that the IRS occasionally has problems with during the processing of original tax returns -- when a taxpayer submits multiple Schedules C and/or Schedules F, and when at least one of the schedules has a positive amount and others have a negative amount that can offset the gain reported on the other schedule.

It's probably simply an IRS error, but you should reply back telling them your situation, highlighting that the loss offsets the gain, and completing the Schedule SE that they're asking for.  If you don't, they might assess tax on the amount that they believe is your self-employment income.


3 Replies
Level 2

IRS sent a letter asking for a Schedule SE but I had a net loss of self employment income and SE says not to file if under 400.00

This is an issue that the IRS occasionally has problems with during the processing of original tax returns -- when a taxpayer submits multiple Schedules C and/or Schedules F, and when at least one of the schedules has a positive amount and others have a negative amount that can offset the gain reported on the other schedule.

It's probably simply an IRS error, but you should reply back telling them your situation, highlighting that the loss offsets the gain, and completing the Schedule SE that they're asking for.  If you don't, they might assess tax on the amount that they believe is your self-employment income.


Level 1

IRS sent a letter asking for a Schedule SE but I had a net loss of self employment income and SE says not to file if under 400.00

Thanks for the answer, seems like a very easy mistake to avoid but hopefully you as right. My letter back has been sent
Level 2

IRS sent a letter asking for a Schedule SE but I had a net loss of self employment income and SE says not to file if under 400.00

It happens, now and then.  I used to work for the IRS.  It happens, don't worry about it,