IRS Notice re: computation of SE tax

[L.S.]

Client just rec'd notice on 2010 1040 that IRS changed the computation of the SE tax. I cannot seem to figure out why - they don't give me much info only that they changed AGI to a lower amt and taxable income to a lower amount, but then increased the total tax on line 60. I went through the calculations on the program and they seem to be correct. He did have 2 Sch C businesses and had self-employment health insurance deduction. Can anyone shed any light on this for me?

thanks,

[SunTaxMan]

Insufficient information for us, I think.

[L.S.]

Insufficient information for us, I think.

I would agree - there is not much there from IRS - I'll give you what I have. IRS says my AGI of $13,574.00 - IRS calc of $13,477. Taxable income my amt of $4224 and theirs of $4127 for total tax mine of $1162 and theirs of $1348 and explanation of they changed computation of the self-employment tax on Sch SE. Client has 2 Sch C with net income of $6335 on one and $3989 on other for total of $10,324. Also has SE health insurance deduction of $5096. The SE health insurance worksheet shows Lines 1 & 3 of $5096 with line 4 of $3989, line 5 of $10,324 line 6 of 39%, 7a of 730, 76 of 285 and lines 8, 10, 13 & 14 of $3704. Also line 15 of $5096.

[L.S.]

I would agree - there is not much there from IRS - I'll give you what I have. IRS says my AGI of $13,574.00 - IRS calc of $13,477. Taxable income my amt of $4224 and theirs of $4127 for total tax mine of $1162 and theirs of $1348 and explanation of they changed computation of the self-employment tax on Sch SE. Client has 2 Sch C with net income of $6335 on one and $3989 on other for total of $10,324. Also has SE health insurance deduction of $5096. The SE health insurance worksheet shows Lines 1 & 3 of $5096 with line 4 of $3989, line 5 of $10,324 line 6 of 39%, 7a of 730, 76 of 285 and lines 8, 10, 13 & 14 of $3704. Also line 15 of $5096.

with Line 16 of $3704 and Line 17 of $1392.

[MN2V]

Client just rec'd notice on 2010 1040 that IRS changed the computation of the SE tax. I cannot seem to figure out why - they don't give me much info only that they changed AGI to a lower amt and taxable income to a lower amount, but then increased the total tax on line 60. I went through the calculations on the program and they seem to be correct. He did have 2 Sch C businesses and had self-employment health insurance deduction. Can anyone shed any light on this for me?

thanks,

I had similar situation...with my own son yet. He is self employed and has his own health insurance.

Wife is self employed (day care) and has her/family health insurance. I showed they owed $220 and

IRS sent letter and check for $1100 saying they corrected my error. However I spent over an hour on

the phone with IRS going over the return. The IRS subtracted both health insurance amounts from each

SE tax computation. They finally agreed that I was correct. I was so upset by this time that I told

the kids to cash the check and put it in savings and wait until (if?) IRS asks for money back. It is

hard enough to tell your own family that I was right and IRS was not, would my regular clients believe?