The CP52 means the IRS found an error in your self-employment tax calculation on Schedule SE and corrected it. Self-employment tax is the self-employed individual's version of FICA taxes — Social Security and Medicare. The rate is 15.3% on the first dollar thresholds and 2.9% on amounts above. Errors in the calculation can result in either a balance due or a refund adjustment.
Common Errors
The most frequent SE tax errors include incorrect net earnings from self-employment on Schedule SE, failing to reduce net earnings by the 7.65% deduction for the employer-equivalent portion, applying the wrong Social Security wage base limit, not accounting for wages from other employment that reduce the Social Security portion of SE tax, and math errors in the calculation itself.
How to Review
Pull your Schedule SE and your Schedule C (or Schedule F for farming). Verify that the net earnings flowing from Schedule C to Schedule SE are correct. Check that you applied the 92.35% factor (which reduces net earnings by the employer-equivalent portion). Verify the Social Security wage base for the tax year. If you also had W-2 wages, make sure you accounted for those wages when calculating the Social Security portion.
If the Correction Is Wrong
Respond within 60 days with documentation showing why your original calculation was correct. Include a copy of your Schedule C and Schedule SE, along with a written explanation of the discrepancy.
If the correction is right, the resulting balance or refund adjustment will be processed automatically. Pay any balance promptly to avoid additional interest.
Questions about a self-employment tax correction? Call us at (813) 229-7100.