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There's nothing unusual about self-employment income. Do you have a question? Why is it significant that the income was earned by a U.S. citizen? Is the U.S. citizen you, or someone else?
Under US / Canada tax treaty this income can't be subjected to SE tax twice - the country where earned has right to tax but Turbotax is excluding the income from income tax but not SE tax
You are being stingy with the details. I assume you are saying that you are U.S. citizen living in Canada, and you have self-employment income from Canada.
TurboTax doesn't really handle this situation. There is a way handle it using forms mode, but TurboTax Online does not have forms mode. You would have to switch to the CD/Download TurboTax software, which you would have to purchase and download. See the following FAQ for instructions to move your tax return to the CD/Download software. You will not be able to e-file your U.S. tax return. You'll have to print it and file it by mail.
How do I switch from TurboTax Online to the TurboTax software?
Go to forms mode and open the Schedule SE Adjustments Worksheet. In part II of the worksheet, enter on line 7 the amount of your self-employment income (probably the same amount that's on line 1a). This will make line 8 zero, remove Schedule SE from your return, and make Schedule 2 line 4 zero, thus eliminating the self-employment tax.
Finish your tax return and print it for filing. On Schedule 2, on the dotted line on line 4, write "Exempt, see attached statement." (Since you have removed the self-employment tax, you might not have any other entries on Schedule 2, in which case it will not be included in your tax return. If that happens, open Schedule 2 in forms mode, print a blank copy, and write the notation on it. Include it in your tax return after Schedule 1, or after Form 1040 if you do not have Schedule 1.)
Attach the required "statement from the appropriate agency of the foreign country verifying that your self-employment income is subject to social security coverage in that country" after all the IRS forms and schedules. Don't forget to sign Form 1040 before you mail the tax return.
Thank you and stingy was because the sotward didn't allow me but so much space - you confirmed what my thoughts were and thanks for the assistance - just wish my employer would let me use our software to do this return as I do this for a living 🙂 but making Turbotax do what it needs to for this type of return is not easy
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