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dietdew10
New Member

Should turbo tax have filled in a value in line 18 for se-s 1040?

 
5 Replies
JohnW152
Expert Alumni

Should turbo tax have filled in a value in line 18 for se-s 1040?

No, that’s a figure that you would enter.

You’ll have to make your own calculation, but the IRS gives you a lot of leeway in figuring the amount.  I include an example below.

On Line 18, you're asked to make a calculation of the portion of the net profit or loss that you reported on Line 3 of Schedule SE that was made between March 27, 2020 and December 31, 2020.

The instructions for Line 18 in the IRS's 2020 Instructions for Schedule SE are vague, but they allow you to use any reasonable method to determine this figure:

 

Use any reasonable method to divide the net profit or (loss) you reported on line 3 between (a) January 1, 2020, through March 26, 2020, and (b) March 27, 2020, through December 31, 2020. A reasonable method will accurately reflect the time when income was earned or accrued and deductible expenses were paid or incurred, depending on your method of accounting. In most cases, a proportional division of the amount reported on line 3 based upon the number of days in each period will be considered reasonable.

 

EXAMPLE:  Say your Schedule SE Line 3 amount was $12,000.  March 27 to December 31 is 280 days.  280 days divided by 366 days (2020 was a leap year) is 0.765.  $12,000 multiplied by 0.765 equals $9,180. 

 

dietdew10
New Member

Should turbo tax have filled in a value in line 18 for se-s 1040?

Perfect, thanks for the help!

lavalampfloyd
Level 1

Should turbo tax have filled in a value in line 18 for se-s 1040?

TT is not allowing a negative value (we had a loss this year) on that line and it says the value of zero is too large.

JamesG1
Expert Alumni

Should turbo tax have filled in a value in line 18 for se-s 1040?

Your eligible income is the net self-employment income that you earned from March 27, 2020 through December 31, 2020.

 

This must be a positive amount so that a self-employment may be computed.  A negative number would not be subject to self-employment tax and the self-employment tax is the tax that you are asking to be deferred.

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lavalampfloyd
Level 1

Should turbo tax have filled in a value in line 18 for se-s 1040?

Got it, thanks!

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