SE Tax

[OkieTaxGal]

I work for a tax office that uses Ortax. They have a box to check on the schedule c that indicates the filer is 18 or under so the SE form is not generated. Is there anything like that for ATX? I haven't found it if there is......Do I just delete the form? Will the IRS be smart enough to look at the age of the filer? I have had them to change an elected use of the Schedule A for state purposes, so the client would get more back on the Federal.

Thanks for all the help.

Paula

[OldJack]

The only time SE tax would not be calculated for any age would be where the minor is working for his parent's non-corp business. That should be a W2 verses a Sch-C.

[OkieTaxGal]

Hey Jack,

Actually I found on the IRS website under their question and answer section under self-employed......... The IRS gives an answer to a question about a son being a newspaper carrier....

The IRS says........Your son may be liable to pay into the social security and medicare system by paying self-employment tax. However, if your son is under the age of 18, he is exempt from self-employment tax.

This is the only place other than Ortax program to show this info.

??

[stevec cpa]

Paula,

Newspaper carriers under the age of 18 are deemed to not be in the trade or business of newspaper sales (see IRC Sec. 1402©(2)(A) and therefore are exempt from SE tax.

Steve.

[Don in Upstate NY]

I work for a tax office that uses Ortax. They have a box to check on the schedule c that indicates the filer is 18 or under so the SE form is not generated. ...

Maybe I am missing something, but my version of OrrTax (the 2007 Windows version) only has three boxes on the C to check for exemption from SE tax:

1. A minister exempt from SE tax,

2. A former insurance salesman with termination pay exempt from SE tax, or

3. Exempt from SE tax due to filed and approved Form 4029.

I see no box related to age (nor to income as a notary or foreign SE income covered by a treaty). Where is it?

[Jack from Ohio]

OldJack is absolutely correct. The only exemptions from Social Security taxes on wage earnings for a person under 18 are:

1) Newspaper carrier as noted by a previous poster

2) "Where the minor is working for his parent's non-corp business. That should be a W2 verses a Sch-C."

Otherwise, all earnings as wages are subject to Social Security taxes.

[Jesse]

Also household employee, such as a babysitter.

[Margaret CPA in OH]

The amount should be shown on Box 3, Other Income, and reported on line 21 as other income. In ATX, if you click on that box, it leads you to a list of items that would be shown there. I believe that if the child's age is input on the Filer's info tab, that may suffice to be not subject to SE. For the 6 or so years that my son was a paperboy, that's where I put it.

[OkieTaxGal]

Maybe I am missing something, but my version of OrrTax (the 2007 Windows version) only has three boxes on the C to check for exemption from SE tax:

1. A minister exempt from SE tax,

2. A former insurance salesman with termination pay exempt from SE tax, or

3. Exempt from SE tax due to filed and approved Form 4029.

I see no box related to age (nor to income as a notary or foreign SE income covered by a treaty). Where is it?

Don, I will check when I go back In next week. I know it's on there somewhere, because I used it last year. She does not use the Windows version she uses the classic version, maybe that makes a difference???

Thank you for all the help. I see there is only a few exeptions to the rule.

I'm so glad I found you guys (and gals) again. JB keeps me laughing thru the season. I was so dissapointed when It dissapeared from the ATX website.

Paula