Frustrated! Self Employment Deferral issue

[mckernan75]

I did my taxes and for the first time, I had to file self employment due to a 1099-NEC. Anyways, going through the screens, I was asked if I wanted to defer my self employment tax. At the time, it said I owe so I selected yes. Fast forward and I ended up getting a refund. The software never caught it, revisited the option, etc. and it was filed with the deferral. The IRS put a hold on my refund and deducted the Amt from my refund (which is ok but the hold isn’t). Tried calling customer service and rep had a language barrier and knew nothing of the software or taxes in general. I asked for a supervisor and got disconnected! What can I do?? Who can I contact? 

[CatinaT1]

If you filed with the deferral and you want to remove it, you will need to amend your return.

If you filed, it is like dropping it into a mailbox - you cannot get it back. 

You'll have to wait until your return is either accepted or rejected. 

• If rejected, you can make any necessary changes. 

• If accepted, you'll need to amend your return.   

• To avoid unnecessary delays, do not amend until your original return has been fully processed.   

• You can e-file your 2020 amended federal tax return, but most states require amendments to be printed and filed by mail. 

• Allow 16 weeks for processing. 

See this TurboTax FAQ for help with amending. 

You can check the status of your amended return here, but allow 3 weeks after filing for it to show up. 

[mckernan75]

Hi Catina! Thank you so much for answering!

The IRS Caught the mistake and fixed it but after speaking with them today, my account has been placed on hold until they send out a notice notifying me of the math error and that they have corrected it. Once that is sent, I am to wait another 7 days (ex: 3/22/21 + 7 = 3/29/21) before they will start the refund release process. Here is what I don't understand: When I was going through the questions/prompts in the Turbo Tax software, it asked me if I wanted to defer my self-employment tax that was due to the IRS. I selected "Yes" because at that point, It was being estimated that I would owe. Once I got to the end of everything and was ready to "review and submit," I was not prompted or advised that I would not be able to defer the payment (which was $183). This was my first time filing self employment so not only did I not know you couldn't do that, I completely forgot I had selected that. I would've changed my answer to paying the $183 with my refund. Why didn't the software catch that error or at least revisit that choice when I reached the "review and submit" section? Why didn't it just automatically change the answer since you can't do that.....isn't that a software flaw? Please advise. 

[JoannaB2]

The software only detects the data such as income and expenses that were incorrectly entered, and yet income tax return may electronically be filed and accepted by the IRS.  Any tax software will not be able to filter if you were using the correct form for the specific transaction, 

Self-employed taxpayers can take advantage of a CARES Act provision that allows them to defer one-half of the social security portion of self-employment tax attributable to net earnings from self-employment for the period March 27, 2020 through December 31, 2020. Since IRS corrected it for you, you don't have to do anything.

[mckernan75]

Considering a lot of people rely on this software to double check mistakes or let taxpayers know if something needs to be reviewed, it is surely lacking in some areas. My self employment didn't start until 4/2/20 so if those dates of 3/27/20 to 12/31/20 are when you can defer that tax amount, why was it corrected by the IRS and deducted from my refund? Does that mean that anyone who is going through the same situation will have their taxes placed on hold as well? IRS correcting it or not, I would prefer not to have to be placed on a hold and delaying my refund. I hope this doesn't happen to anyone else as it appears TurboTax doesn't seem too concerned....hopefully, there aren't others in the same situation waiting for their refund to help survive.