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The 2019 tax planner within the 2018 Proseries program is only calculating 4.2% in total self-employment tax for a particular client.

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Level 3
last updated ‎December 16, 2019 12:38 PM

This Sch C client will have $170k in net self employment, so shouldn't the 2019 tax rate be approaching 15%?  Other Sch C clients are working as expected.  I tried removing the 2019 planner from the return, then re-did but it still doesn't calculate proper SE taxes.  What gives? 

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Level 10
last updated ‎December 16, 2019 12:38 PM
I'll start with the easy one: Have you entered any W-2 wages for the self-employed person?  (Or maybe entered the spouses W-2 in the taxpayer box?)

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4 Replies 4
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Level 3
last updated ‎December 16, 2019 12:38 PM
Now I got it.  Both the taxpayer and spouse have wages in 2018.  2019 planner reflects TP with wages of $112k plus Sch C income of $170k.  So, for SE tax, TP only needs to pay SS on $16k plus 2.9% on the $170k.  Thanks for thawing my brain freeze!!  🙂
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Level 10
last updated ‎December 16, 2019 12:38 PM
Great, thanks for posting back!  I've done a bunch of 2019 projections in the 2018 software and I'm sure I just accepted the SE tax calc for most of them.  So I'm happy to hear there isn't a bug!  You do have to be careful to enter the 401(k) stuff in the W-2 section so that it will calculate SS wages correctly for determining SE tax.
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Level 3
last updated ‎December 16, 2019 12:38 PM
Thanks again!  Very relieved I don't have to tell my client his 2019 quarterlies were way too low.  whew!  Would be nice if Proseries showed the SE tax projection calc--even if only via cross reference.
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Highlighted
Level 10
last updated ‎December 16, 2019 12:38 PM
I'll start with the easy one: Have you entered any W-2 wages for the self-employed person?  (Or maybe entered the spouses W-2 in the taxpayer box?)

View solution in original post

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