I reported crp program (1099 G) and am getting social security benefits, so how do I avoid paying se tax? Not sure where to go to trigger that?

Right now on schedule se - there is no amount on line 1b - and I am getting "charged" self employment tax.  There NEEDS to be an amount on line 1b because I receive social security benefits, but I don't know what question I need to answer to trigger that number to be there.  It is very frustrating.

Answer

In the Self-Employed Online program:

Sign into your account, your return, and click “Pick up where I left off.”

Click Federal on the left side-bar

Click Income & Expenses

Scroll down to Rentals, Royalties, and Farm and click Show more

Scroll down to Farm Income and Farm Rental and click Start or Revisit

“Did you have any farm or farm rental income in 2018?” click Yes

Select “I received agricultural payments on a 1099-MISC or 1099-G for my farm rental” and click Continue

Continue through the interview until you get to the income screen

Scroll down to Payments from Government Reported on 1099-G  and click Start

Continue through this interview and enter the 1099-G

If you don't have an EIN number, you can enter your social security number

If you reported Social Security, the 1099-G should not be taxed.

If this 1099-G is reporting a CRP (Conservation Reserve Program) payment, you are required to enter it on schedule F. In TurboTax this section is called Farm Income and Expenses. You will need to upgrade to the online version of Self Employed. I understand you are retired and not actively farming. There is an exclusion just for people like you. After you enter this income on schedule F under Payments from the Government reported on 1099-G you then need to review the Ag Programs section just below it to see if SE tax applies. This income is subject to federal and state income tax. Be sure to include your expenses associated with this income (RE taxes, vehicle mileage, insurance, weed spray, etc.)

Below is from IRS publication 225, page 11;

Conservation Reserve Program (CRP)

Under the Conservation Reserve Program (CRP), if you own or operate highly erodible or other specified cropland, you may enter into a long­term contract with the USDA, agreeing to convert to a less intensive use of that cropland. You must include the annual rental payments and any one­time incentive payment you receive under the program on Schedule F, lines 4a and 4b. Cost­share payments you receive may qualify for the cost­sharing exclusion. See Cost-Sharing Exclusion (Improvements), later. CRP payments are reported to you on Form 1099­G.

IRS Tip; Individuals who are receiving Social Security retirement or disability benefits may exclude CRP payments when calculating self-employment tax. See the instructions for Schedule SE (Form 1040).

TurboTax will do this above IRS Tip for you if you go thru the Ag Program interview.



Was this answer helpful? Yes No
Original
TurboTaxKrisD , EA Enrolled Agent
TurboTax TaxPro

No answers have been posted

More Actions

People come to TurboTax AnswerXchange for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach:

Do you still have a question?

Ask your question to the community. Most questions get a response in about a day.

Post your question to the community
Default