Schedule SE, which used for self-employment tax is the tax form all self-employed individuals must file. One of the parts where taxpayers are challenged the file the most is the second page of it where the maximum deferral of self-employment tax payments are reported. It has 9 lines starting from Line 18 through Line 26.
The self-employed individuals need to start by entering the portion of line 3 that can be attributed to between March 27 and December 31 of the tax year. This part is also referred to as max deferral line 18. Self-employed taxpayers can enter 50 percent of the Social Security taxes paid between March 27 and December 31 under Section 1401(a). For example, if the total amount of Social Security taxes paid from self-employment income is $5,000, enter $2,500 on Line 18 of Schedule SE.
Although where the max deferral located can change over time with the updates to the Schedule SE, the logic behind what to enter will remain the same.