• Self Employment Tax Deferral on 2020 Return in TurboTax

    From D L@21:1/5 to All on Mon Aug 2 11:39:37 2021
    Hi. If the 2020 tax return had a self employment tax deferral amount to be paid later. After it is paid, should an entry be made into TurboTax 2021 as an estimated tax entry for the amount paid to avoid having TurboTax pull in the 2020 tax file with the
    deferred amount which is shown as unpaid?

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  • From Bob Sandler@21:1/5 to All on Mon Aug 2 12:12:28 2021
    Hi. If the 2020 tax return had a self employment tax
    deferral amount to be paid later. After it is paid, should
    an entry be made into TurboTax 2021 as an estimated tax
    entry for the amount paid to avoid having TurboTax pull in
    the 2020 tax file with the deferred amount which is shown
    as unpaid?

    It's too soon to know what TurboTax 2021 will do with the
    deferred self-employment tax. For that matter, we don't yet
    know whether the IRS forms for 2021 will have any place to
    carry over or reconcile the deferred self-employment tax. I
    would assume that they will handle it appropriately, and not
    treat it as tax due on the 2021 tax return. It might not
    appear on the 2021 tax return at all.

    I certainly would not enter the payment as an estimated tax
    payment for 2021, because that's not what it is. Entering it
    as an estimated tax payment would make the tax calculation
    on the 2021 tax return incorrect, resulting in an IRS notice
    with an additional payment due, plus penalties and interest.
    Wait for guidance when the 2021 forms and software are
    available.

    Bob Sandler

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    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
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  • From D L@21:1/5 to Bob Sandler on Mon Aug 2 12:54:07 2021
    On Monday, August 2, 2021 at 9:13:33 AM UTC-7, Bob Sandler wrote:
    Hi. If the 2020 tax return had a self employment tax
    deferral amount to be paid later. After it is paid, should
    an entry be made into TurboTax 2021 as an estimated tax
    entry for the amount paid to avoid having TurboTax pull in
    the 2020 tax file with the deferred amount which is shown
    as unpaid?
    It's too soon to know what TurboTax 2021 will do with the
    deferred self-employment tax. For that matter, we don't yet
    know whether the IRS forms for 2021 will have any place to
    carry over or reconcile the deferred self-employment tax. I
    would assume that they will handle it appropriately, and not
    treat it as tax due on the 2021 tax return. It might not
    appear on the 2021 tax return at all.

    I certainly would not enter the payment as an estimated tax
    payment for 2021, because that's not what it is. Entering it
    as an estimated tax payment would make the tax calculation
    on the 2021 tax return incorrect, resulting in an IRS notice
    with an additional payment due, plus penalties and interest.
    Wait for guidance when the 2021 forms and software are
    available.

    Bob Sandler

    Thanks Bob.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
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  • From Bob Sandler@21:1/5 to All on Mon Aug 2 19:45:33 2021
    It's too soon to know what TurboTax 2021 will do with the
    deferred self-employment tax. For that matter, we don't yet
    know whether the IRS forms for 2021 will have any place to
    carry over or reconcile the deferred self-employment tax. I
    would assume that they will handle it appropriately, and not
    treat it as tax due on the 2021 tax return. It might not
    appear on the 2021 tax return at all.

    It turns out that the IRS has recently posted DRAFTS of Form
    1040, Schedules 1, 2, 3, and Schedule SE for 2021. I don't
    see anything about the deferred self-employment tax on any
    of those draft forms. Of course these are just drafts, but
    it seems likely that the deferred tax is not going to be
    shown anywhere on the 2021 tax return. That makes sense,
    since the payment is due by December 31, 2021, and you
    wouldn't be filing your 2021 tax return until after that. So
    it looks like payment of the deferred tax will be handled
    outside of the tax return.

    Bob Sandler

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From Alan@21:1/5 to Bob Sandler on Sat Aug 7 17:05:23 2021
    On 8/2/21 4:45 PM, Bob Sandler wrote:
    It's too soon to know what TurboTax 2021 will do with the
    deferred self-employment tax. For that matter, we don't yet
    know whether the IRS forms for 2021 will have any place to
    carry over or reconcile the deferred self-employment tax. I
    would assume that they will handle it appropriately, and not
    treat it as tax due on the 2021 tax return. It might not
    appear on the 2021 tax return at all.

    It turns out that the IRS has recently posted DRAFTS of Form
    1040, Schedules 1, 2, 3, and Schedule SE for 2021. I don't
    see anything about the deferred self-employment tax on any
    of those draft forms. Of course these are just drafts, but
    it seems likely that the deferred tax is not going to be
    shown anywhere on the 2021 tax return. That makes sense,
    since the payment is due by December 31, 2021, and you
    wouldn't be filing your 2021 tax return until after that. So
    it looks like payment of the deferred tax will be handled
    outside of the tax return.

    Bob Sandler

    You won't find it on the 1040 because the employer is responsible for withholding the amount from the employee's 2021 wages and remitting it
    to the IRS. The employer is also responsible for remitting the deferred
    taxes for employees who are no longer employed.

    See https://www.irs.gov/newsroom/what-employers-need-to-know-about-repayment-of-deferred-payroll-taxes

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
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  • From Bob Sandler@21:1/5 to All on Sat Aug 7 22:13:30 2021
    You won't find it on the 1040 because the employer is responsible for >withholding the amount from the employee's 2021 wages and remitting it
    to the IRS. The employer is also responsible for remitting the deferred
    taxes for employees who are no longer employed.

    We're talking about someone who is self-employed, not an
    employee. The question is about a self-employed person who,
    on his 2020 tax return, deferred the Social Security portion
    of the self-employment tax. The deferred amount is on
    Schedule 3 line 12e of his 2020 tax return. The
    self-employed person is responsible for paying the deferred
    tax himself. There is no employer involved, no wages, and no
    withholding.

    Bob Sandler

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
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  • From D L@21:1/5 to Alan on Sat Aug 7 23:45:50 2021
    On Saturday, August 7, 2021 at 2:06:04 PM UTC-7, Alan wrote:
    On 8/2/21 4:45 PM, Bob Sandler wrote:
    It's too soon to know what TurboTax 2021 will do with the
    deferred self-employment tax. For that matter, we don't yet
    know whether the IRS forms for 2021 will have any place to
    carry over or reconcile the deferred self-employment tax. I
    would assume that they will handle it appropriately, and not
    treat it as tax due on the 2021 tax return. It might not
    appear on the 2021 tax return at all.

    It turns out that the IRS has recently posted DRAFTS of Form
    1040, Schedules 1, 2, 3, and Schedule SE for 2021. I don't
    see anything about the deferred self-employment tax on any
    of those draft forms. Of course these are just drafts, but
    it seems likely that the deferred tax is not going to be
    shown anywhere on the 2021 tax return. That makes sense,
    since the payment is due by December 31, 2021, and you
    wouldn't be filing your 2021 tax return until after that. So
    it looks like payment of the deferred tax will be handled
    outside of the tax return.

    Bob Sandler

    You won't find it on the 1040 because the employer is responsible for withholding the amount from the employee's 2021 wages and remitting it
    to the IRS. The employer is also responsible for remitting the deferred
    taxes for employees who are no longer employed.

    See https://www.irs.gov/newsroom/what-employers-need-to-know-about-repayment-of-deferred-payroll-taxes

    Thanks a lot Alan.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From ""Retired"@home.com@21:1/5 to Alan on Sat Aug 7 23:45:19 2021
    On 8/7/21 5:05 PM, Alan wrote:
    On 8/2/21 4:45 PM, Bob Sandler wrote:
    It's too soon to know what TurboTax 2021 will do with the
    deferred self-employment tax. For that matter, we don't yet
    know whether the IRS forms for 2021 will have any place to
    carry over or reconcile the deferred self-employment tax. I
    would assume that they will handle it appropriately, and not
    treat it as tax due on the 2021 tax return. It might not
    appear on the 2021 tax return at all.

    It turns out that the IRS has recently posted DRAFTS of Form
    1040, Schedules 1, 2, 3, and Schedule SE for 2021. I don't
    see anything about the deferred self-employment tax on any
    of those draft forms. Of course these are just drafts, but
    it seems likely that the deferred tax is not going to be
    shown anywhere on the 2021 tax return. That makes sense,
    since the payment is due by December 31, 2021, and you
    wouldn't be filing your 2021 tax return until after that. So
    it looks like payment of the deferred tax will be handled
    outside of the tax return.

    Bob Sandler

    You won't find it on the 1040 because the employer is responsible for withholding the amount from the employee's 2021 wages and remitting it
    to the IRS. The employer is also responsible for remitting the deferred
    taxes for employees who are no longer employed.

    See https://www.irs.gov/newsroom/what-employers-need-to-know-about-repayment-of-deferred-payroll-taxes



    And here is the equivalent IRS Newsroom article explaining how a
    SELF-employed person pays the deferred tax.

    https://www.irs.gov/newsroom/how-self-employed-individuals-and-household-employers-repay-deferred-social-security-tax

    Basically these steps:

    "Individuals can pay the deferred amount any time on or before the due
    date. They:

    1. Can make payments through the Electronic Federal Tax Payment
    System or by credit or debit card, money order or with a check.
    2. Should be separate payments from other tax payments to ensure
    they are applied to the deferred tax balance on the tax year 2020 Form
    1040 since IRS systems won't recognize the payment for deferred tax if
    it is with other tax payments or paid with the current Form 1040.
    3. Should designate the payment as "deferred Social Security tax."
    "

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From Maria Ku@21:1/5 to All on Wed Aug 25 23:46:39 2021
    If a TP wants to send their payment by check, do we know WHERE to send this payment to? The IRS says to NOT send it to where we send our 1040-ES.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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