Why does turbotax automaitcally fill in a $53 business tax (slef-employment tax) for me?

[manbeing]

I am using turbotax home business version. I have a single-member LLC and I report the business income and expense on Schedule C. 

After filing these, TT automatically filled a $53 business Taxes (self-employment tax) for me.  You can see it didn't do this in 2024 preparation.  I didn't enter anything related $53 business taxes.

How could that happen?

And how can I remove it? 

[ThomasM125]

Since you are reporting income on a schedule C as a sole-proprietor, your net business income is subject to a mandatory self-employment tax of about 15% of your net income. TurboTax calculates that from your business entries and enters the tax on your return. It may not have happened last year if you didn't have any net income from your business after expenses.

[VolvoGirl]

What was your Profit or Loss on Schedule  C last year?  

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment. You pay 15.3% SE tax on 92.35% of your Net Profit (If it is greater than $400). The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare (FICA). So you get social security credit for it when you retire. It is in addition to any regular income tax you owe on it.

[manbeing]

@ThomasM125  I reported $200 net business income in 2024, and $1,995 net business income 2025, what is the threshold? when i changed the net business income to $410, i still didn't see the business tax was imposed.

[manbeing]

@VolvoGirl  if i changed the net business income to $410 (over $400), the business tax (self-employment tax) was still $0

[VolvoGirl]

Yes 400.  Actually it works out to $433.  But 1,995 should be more SE tax.  

1,995 x .9235 = 1,842.38 x .153 = $281.88 SE tax.  

[manbeing]

@VolvoGirl I have a W-2 wage job, so  I think W-2 wages already covered the Social Security portion (12.4%).

that's why I just need to pay 

1,995×0.9235=1,842

Medicare portion:

1,842×2.9%≈53 ?

[Opus 17]

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@manbeing wrote:

@VolvoGirl I have a W-2 wage job, so  I think W-2 wages already covered the Social Security portion (12.4%).

that's why I just need to pay 

1,995×0.9235=1,842

Medicare portion:

1,842×2.9%≈53 ?

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That is true if your W-2 wages are more than the social security limit for the year ($176,100 for 2025).  If your income is more than that, then your business SE tax will only be the 2.9% Medicare portion.  

[VolvoGirl · Accepted solution]

@manbeing   Do you also have  W2 income?  Then there is a max for the Social Security part of the SE Tax.

You are paying 15.3% for…..
SS for employer 6.2%
SS for employee 6.2%
Medicare for employer 1.45%
Medicare for employee 1.45%

If you also have W2 income, you have to break out the Social Security and Medicare taxes. Only the Social Security part maxes out.

[manbeing]

@VolvoGirl  Yes, i have a W2-income. i think that's why social security tax has maxed out, so i will have to pay the medicalcare taxes portion - 2.9%

[VolvoGirl]

Yep, I put your amounts into my spreadsheet.

[Opus 17]

The overall point here is that all employees pay social security and medicare tax, and the business matches those taxes.  If you are self-employed, you are both the business and the employee, so you pay both halves of the tax. It's just how the system works.