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If you realize a net business loss on Schedule C Profit or Loss from Business, you are not required to file Schedule SE Self-Employment Tax and pay self-employment taxes. However, the IRS provides an optional self-employment tax calculation method which may give you credit toward Social Security without increasing your taxes. If you would like to test whether the Optional Method benefits you in TaxACT, follow these instructions:
  1. Click on the Federal Q&A tab
  2. Click Business Income to expand the category and then click either Self-Employment Tax or Spouse Self-Employment Tax
  3. Click the Optional Method button and continue to the screen titled Schedule SE - Nonfarm Optional Method
  4. Check the box to Use the Nonfarm Optional Method. If your refund amount decreases, click the back arrow and uncheck Use the Nonfarm Optional Method

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