What is Maximum Deferral of Self-Employment Tax Payments?

[ffarfan]

My wife was self-employed last year, and it looks like when we filed our taxes, using TurboTax, our Schedule SE (Form 1040) included an amount in the "Maximum Deferral of Self-Employment Tax Payments" section. What does this mean? Besides that we still owe that money?

[STaxLady]

@ffarfan 

This is a topic that will be of interest to many taxpayers for 2021. Thank you for asking!

The law requires the amounts deferred under the relief to be repaid in up to two payments. How much you must repay depends on how much you deferred:

• If you deferred the whole amount you were eligible to defer, half of the deferred amount is due by December 31, 2021. The second half of the deferred amount is due by December 31, 2022.

This is an excerpt from the following TurboTax article that will provide more detailed information.

https://turbotax.intuit.com/tax-tips/self-employment-taxes/what-is-payroll-tax-relief-and-when-does-... 

Here is a link to IRS information on how to make these payments: 

https://www.irs.gohttps://www.irs.gov/newsroom/how-self-employed-individuals-and-household-employers... 

I hope this answers your question. If not, don't hesitate to reply here for more information.

Best Regards,

STaxLady

[ffarfan]

Thank you so much for your thorough reply! That's valuable information indeed!

I guess my burning question still persist; in what moment did I -- or TurboTax -- decided to withdraw taxes? Or is it because since my wife was self-employed, she acts as employer?

Thanks again for the help!

[STaxLady]

@ffarfan 

There was a question built in to TurboTax for anyone with self-employment that asked if you wanted to defer a portion of the tax. You would have had to answer this question in order to move on in the software.

I hope this helps. 

STaxLady

[ffarfan]

Thanks again for your helpful answer!!