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Ask Dr. Fiona Chen Your Own Question
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 300
Experience:  Former IRS Revenue Agent
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I was trying to figure out why on my 2015 taxes "self

Customer Question

Hi. I was trying to figure out why on my 2015 taxes "self employment tax" in Section B - Long Schedule SE.... why on line 7 they indicated $118,500.00 I never made that much
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: I know that $118,500 has to do with different tax brackets but I never made that much in my business
JA: Is there anything else important you think the Accountant should know?
Customer: Section A, 2: $8749.00 3: $8749.00
Submitted: 2 months ago.
Category: Tax
Expert:  Dr. Fiona Chen replied 2 months ago.

Dear Customer,

The amount you are referring to is not filled in by you or your accountant. This number is ***** by the IRS Form Schedule SE itself.

According to its explanation, this number $118,500 is the highest number for any taxpayer to pay social security tax on his/her tax return. If a taxpayer has a W-2 wage income plus self employment income more than 118,500, the taxpayer is required to pay social security tax only on 118,500.

Therefore, this number did not apply to you. The calculation of your SE schedule did not concern or use this number.

As you described above, your self employment tax is calculated in Section A using the number you described.

Therefore, if you are reviewing your tax return, you can ignore this number of 118,500 and this section B. They do not seem to have been used to calculate your self employment tax.

If you continue to read the form of Schedule SE, on page 2, there is a number of 4,880 on line 14. That is a pre-provided number as well by the form by the IRS. The purpose for the IRS to provide these numbers is to help the taxpayer to correctly fill out the tax return.


Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP

Customer: replied 2 months ago.
OK so this $118,700.00 was basically placed there for no reason and/or shouldn't be placed there... is what you're saying?
Expert:  Dr. Fiona Chen replied 2 months ago.

Dear Customer,

In terms of the form design and for the possible use of a taxpayer who may need it, it is there for a reason and purpose and can be helpful to that taxpayer for this number to be on that form.

But for another taxpayer or in the situation you described above, that number does not apply and is not useful and/or used.