How to show I will pay zero SS taxes due to totalization agreement using self-employed online?

[brtaxit]

Here's a bit more info about my situation. I live and work in Brazil. We have a new Totalization Agreement between the US and Brazil. I use the online Self-employed version of TurboTax. I have been told that I need to show that I will pay zero Social Security tax, and send a copy of my official social security tax coverage from Brazil together with my return.

[ThomasM125]

That is an unusual situation, I assume you have self-employment income?

I would suggest you complete your return as normal, and then delete the sch SE and/or sch SE adj wks to remove the self employment tax as follows:

1. Find the Tax Tools option on your left menu bar and click on it

2. Click on Tools

3. Find Delete a Form and click on it

4. Look for schedule in the list of forms and click on the option to delete it

[brtaxit]

Thank you Thomas125 for the help.I do have a couple of questions before I continue with my taxes:

1. What does sch SE refer to?

2. What does sch SE adj wks refer to?

3. Once I get my filing finished, I will need to send what is called a Certificate of Coverage together with my tax filing. The certificate is a digital file. Can I attach a digital file if I efile? If not, can I print my tax return and just add my printed Certificate of Coverage?

I use the TurboTax Self-employed Online version of the program.

Thank you once again for the help. 

[KarenJ2]

You would need to overwrite the value for the SE taxes with Zero. You can only do that with the CD/desktop version of Turbotax in the Forms mode.. However,you will not be able to e-file your return.

Schedule SE is the form that calculates your self-employment tax.

Schedule SE adj is the worksheet for Schedule SE

[brtaxit]

OK. So I have just confirmed that the IRS is not processing paper tax returns. This being the case, I would need to e-file my return. Here are two questions:

1. Using the CD/desktop version of Self-employed, can I set the SS tax amount owed to zero? And...

2. Can I attach my Certificate of coverage from Brazil to my e-filed Tax return?

Thank you all for your help. I really do appreciate the help with this.

[brtaxit]

Hi. This is a new post now in 2021 but regarding the same subject. KarenJ2 I could use your help. I am using the desktop version for Self employed. How do I know what form I need to delete. I've looked for it but really have not been able to find the form to delete so that I can put zero for SS tax owed. Thanks for the help. All the best to you.

[DianeW777 · Accepted solution]

When you are in the Forms mode (click on Forms in the upper right) scroll to the SE Adj worksheet.  You will need to hover over the income field, then right click to override. Once the field is red, clear the field and enter zero for the income.  This will eliminate the social security and Medicare tax.

This will likely eliminate the ability to e-file as noted by @KarenJ2. You should see that Schedule 2 is either gone from your file or line 4 is blank.

There should be no SE tax included on the return.

See the image below.  Once completed you can return to Step-by-Step mode to finish your return.  You will file by mail because the return will not pass e-file check.

[brtaxit]

Thank you @DianeW777 . Your answer was very clear and the images are a big help. Thank you so much. I owe you a coconut water at the beach the next time you are down here. I really appreciate your help. All the best. 

[brtaxit]

Here's another question for you all. I live in Brazil and will now only pay into the Brazilian Social Security system. Our income in very low, under USD20,000.00 . In 2018, we paid no income tax and only paid SS self-employed tax. Now that we will be only paying into the Brazilian SS, am I correct in assuming we won't owe anything to the IRS? The reason I am asking is that I used to be very careful with home office expenses, documenting everything to be able to pay the least in SS tax. But now it doesn't seem to matter. So I am wondering if it's OK to just not do such a detailed report of all our business expenses because it won't make any difference in what we owe. 

Sorry this is not so clear. Any ideas would be helpful. 

[brtaxit]

OK @DianeW777 . I the help you gave works great. So now my return shows I owe zero federal taxes. Thank you. You should be a teacher. 

Regarding the question above: I think a better question is this... does it matter to the IRS if from now on, I don't document all my business expenses, since for me, it doesn't matter for my bottom line? 

Thank again for the help. 

[DianeW777]

I would suggest that you keep a record of most of your expenses, with the exception of the home office, in case something changes in the future. A bank account for your activity would greatly reduce record keeping because it would show all of the income coming in and the expenses that are going out.  

Thank you for your kind words.

[brtaxit]

Thank you for the quick response. Do you think it a problem if we now stop listing all our expenses? The TurboTax program told me that I am not eligible for home office this year. No problem. Most of our online expenses do go through our US bank account. For our teaching now our only expense is our internet. thanks for your thoughts. All the best to you. 

[DawnC]

If you don't qualify for the home office deduction, you don't have to report those expenses.  You only need to keep records for the deductions and credits you claim on your tax return.  

[brtaxit]

Hi there. We have never filed state tax return since we live out of the country. If we don't owe any state taxes and we have never filed in that state, is there any reason to file our state taxes?