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March 30, 2020
Question

With a Payroll service how do I enter on my sch C?

  • March 30, 2020
  • 1 reply
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    1 reply

    KathrynG3
    March 30, 2020

    It depends. The best way to handle the business accounting for your Schedule C is to have a separate bank account from your personal bank account and have a system where all income and expenses are being recorded, at the minimum.

     

    The payroll service amount for gross payroll would be reported as gross wages on your Schedule C. Any garnishments or employee social security and medicare taxes would not be expenses. Owners do not get payroll.

     

    You can also deduct payroll service expenses and the payroll taxes you had to pay.

    The employer pays 7.65% for social security and medicare combined. The employer will also pay Federal Unemployment Taxes and State Unemployment Taxes. These expenses are deductible.

     

    I recommend QuickBooks Self-Employed to keep track of your income and expenses throughout the year. It is free for TurboTax Self-Employed customers for one year. 

     

    For more details, see these resources:

    Reporting Self-Employment Business Income and Deductions

    How do I report income from self-employment?

     

    Qualified Business Income Deduction

    Home Office Deduction

    Tax Guide for the Self-Employed

    @freckles1038