When wages are paid to employees, a corporation has to contribute additional amounts by matching their employees SS and Medicare contributions. Are those matched amounts an income tax deduction? If so, how and where on the corp return (1120) is the deduction taken? Is added to the "wages and salaries" category? Thanks. DB
Payroll taxes go on Line 17 of Form 1120 along with other taxes, such as my state income tax; at least that is where my accountant puts the payroll taxes. They are itemized first on a separate statement he prepares and then a note is put on Line 17 referring to that statement, The more important issue is, if you need to ask this question then you really need to talk to an CPA or other tax professional. I keep my own books, but when I first started my very small, one-employee, business I found a good CPA, had enough face-to-face and telephone meetings with him to understand how to keep my books and file the various Federal and state quarterly returns, Forms 941, 940, NY-45-MN, etc. However, he continues to be available for any questions I have, reviews our books before year end to make sure I have not made any mistakes, and prepares our Federal and state income tax returns.
-- Vic Roberts Replace xxx with vdr in e-mail address.
Vic is correct. Your question suggests that you could easily be missing other legitimate deductions or making other tax reporting errors. You should engage the services of a local tax professional (CPA or EA) who specializes in small business taxation. In fact, you should have done that before you started the business.
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