Joint filing of taxes, Corp pay and Teacher's pay with zero Social Security wages

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leod
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Joined: Tue Sep 22, 2009 2:54 pm

Joint filing of taxes, Corp pay and Teacher's pay with zero Social Security wages

Post by leod »

I work on a private corporation and my spouse is working as a public school teacher. I am preparing our tax return as Married filing joint, my spouse do not pay Social Security wages and Box 3 shows zero amount.

When I enter the W2 in the tax software, it seems to recalculate the social security tax on the whole income and we owe Federal taxes as a result. Is this correct or is there a different situation I need to put in the tax software?

EDIT: just to clarify on "recalculate the social security tax", box 3 is still zero in the form.Wwhat I mean is when it calculates the taxable income it seems to think that we owe taxes on the whole govt income since there is zero social security tax. Should we pay tax on the spouse income since they do not pay Social Security wages?
Last edited by leod on Sat Feb 10, 2024 8:09 pm, edited 1 time in total.
talzara
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Re: Joint filing of taxes, Corp pay and Teacher's pay with zero Social Security wages

Post by talzara »

leod wrote: Sat Feb 10, 2024 4:30 pm I work on a private corporation and my spouse is working as a public school teacher. I am preparing our tax return as Married filing joint, my spouse do not pay Social Security wages and Box 3 shows zero amount.

When I enter the W2 in the tax software, it seems to recalculate the social security tax on the whole income and we owe Federal taxes as a result. Is this correct or is there a different situation I need to put in the tax software?
Which tax program? Each one is different.
BogleTaxPro
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Re: Joint filing of taxes, Corp pay and Teacher's pay with zero Social Security wages

Post by BogleTaxPro »

Most tax software calculates and prepopulates the other fields based on box 1 to reduce keying errors. You should blank or zero out the calculated values to match the w2.
Topic Author
leod
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Re: Joint filing of taxes, Corp pay and Teacher's pay with zero Social Security wages

Post by leod »

I made some clarification on my post above, I am using HR block software and it shows zero on box 3 of the spouse income in the form.
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CAsage
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Re: Joint filing of taxes, Corp pay and Teacher's pay with zero Social Security wages

Post by CAsage »

In most cases, the income is the same for taxes, Medicare, Social Security. I know Taxslayer automatically carries the first entry to the other two boxes. So, you need to make sure you enter the Social Security and Medicare income specifically as 0, i.e. override the "help". If it's not in the interview (I don't recall since I'm retired), check the W-2 worksheet.
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FiveK
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Re: Joint filing of taxes, Corp pay and Teacher's pay with zero Social Security wages

Post by FiveK »

leod wrote: Sat Feb 10, 2024 4:30 pm When I enter the W2 in the tax software, it seems to recalculate(s) the social security [income] tax on the whole income and we owe Federal taxes as a result. Is this correct...?
As edited, probably.
...when it calculates the taxable income it seems to think that we owe taxes on the whole govt income....
Because you do.
Should we pay tax on the spouse income since they do not pay Social Security wages?
Yes, for income tax purposes it is box 1 that matters.

Does that make sense?
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mhadden1
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Re: Joint filing of taxes, Corp pay and Teacher's pay with zero Social Security wages

Post by mhadden1 »

Sounds like the tax program thinks your wife owes self-employment tax, which she doesn't. Maybe you can look at the underlying forms that are being produced to verify this. If so I'm guessing the tax software has a way to handle this less common situation.
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pshonore
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Re: Joint filing of taxes, Corp pay and Teacher's pay with zero Social Security wages

Post by pshonore »

Does your spouse pay the Medicare portion? In most states where SS is not paid by teachers, the Medicare portion is paid in order to allow teachers to qualify for Medicare after 10 years of payments.
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