Amend to correct SE assignment

[Margaret CPA in OH]

When preparing the recent return, I noticed somehow that for 2016 I had filed the return with SE for husband (who had less than $00 in SE income) rather than wife, a minister required to file SE for housing, etc. What is the best way to amend?  Just send in the 1040X with incorrect SE stamped DO NOT FILE and corrected SE showing spouse instead of filer, maybe highlighted? Other suggestions happily received!

[Abby Normal]

1040X with corrected SE form and an adequate description in the explanation box should do it.

Not sure what you want to stamp 'Do not file' on.

Taxpayer's should check their SS earnings in about a year, because I doubt the 1040X will be updated over to SSA.

[Margaret CPA in OH]

I usually include (taught to do so at my first firm) copies of 'as originally filed, do not process' (stamped multiple times) forms.  That always included corrected numbers in the margins but this one won't.  Thanks again!

[Max W]

Do not amend.  You will be filing a zero change in tax and the IRs  has a good chance of screwing it up  as it is not a tax issue, but a SS earnings isuue.

Wait a year until your clients earnings are posted to the SS files.  

Then, there is a procedure on the SS website for correcting them.

PDF]  Request For Correction of Earnings Record - Social Security

https://www.ssa.gov/forms/ssa-7008.pdf

SOCIAL SECURITY ADMINISTRATION ... If you disagree with wages reported to your earnings record, complete Item 7. ... If you do not have self-employment income that is incorrect go on to item 10 for any remarks, and then complete Item 11

 

[Margaret CPA in OH]

Max, thanks so much for this!  I would never have thought of it.  Since this was for tax year 2016, wouldn't it be already posted so the client can do this now?  Also, would both husband and wife follow this procedure as both are incorrect (I haven't read it yet but will)?

[Max W]

3 hours ago, Margaret CPA in OH said:

Max, thanks so much for this!  I would never have thought of it.  Since this was for tax year 2016, wouldn't it be already posted so the client can do this now?  Also, would both husband and wife follow this procedure as both are incorrect (I haven't read it yet but will)?

Oh! I was thinking 2018.   If it was for 2016, they can do it now.   You could fill out the forms for them and have them sign it.

[Gail in Virginia]

21 hours ago, Margaret CPA in OH said:

When preparing the recent return, I noticed somehow that for 2016 I had filed the return with SE for husband (who had less than $00 in SE income) rather than wife, a minister required to file SE for housing, etc. What is the best way to amend?  Just send in the 1040X with incorrect SE stamped DO NOT FILE and corrected SE showing spouse instead of filer, maybe highlighted? Other suggestions happily received!

Maybe I am missing something, but if husband had negative SE income (less than $00) but wife did not, wouldn't the amount of tax change if the income was moved from him to her?  She would be paying SE tax on all of it, as opposed to him paying on the amount above his negative SE earnings. 

[Max W]

Gail makes a good point.  If there is a change in the amount of tax, then the return should be amended.  Then, the client would have to follow up on a later date, probably in 2021, to see if the correct changes took place.

 

 

 

[Catherine]

On 7/11/2019 at 1:47 PM, Max W said:

If there is a change in the amount of tax

exceeding $50.  Under that, it costs them more effort to look at than it's worth.  But keep a copy in case the IRS makes changes later, to see if they then match up.

[Margaret CPA in OH]

Gail, et al, the wife minister's W-2 was entered as spouse and Special type, clergy.  The 1040 Clergy worksheets were completed.  Husband, filer, had $325 non-employee compensation. Somehow, the SE created was short form for filer and should have been long for for spouse.  The amount of SE tax was actually almost correctly calculated, off by just $15.  I can't easily find out why but it was in their favor.  The remaining issue is that the SE tax was reported for filer, husband, and not spouse, minister wife.

So I will still pursue the path Max recommended as the tax difference is less than $50 and we just need to be sure she gets the proper credit.

Thanks again, all, for great guidance! What a group of fine professionals on this board...