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December 11, 2024
Question

Can I deduct my cost for an employee payroll from my 1099 self employed position?

  • December 11, 2024
  • 2 replies
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    2 replies

    Employee
    December 11, 2024

    @kristencaudill  as a small business owner  or a self-employed person (  another entity / person issues  a 1099-NEC to you or your entity ),  part of  expenses  is  wages  ( including FICA contribution --if ) and/or contract  work that you pay for -- it is a business expense  both for federal and State purp;oses.

     

    Does this answer your query ?   Is there more I can do for you ?

    VolvoGirl
    Employee
    December 11, 2024

    @kristencaudill    What do you mean your cost?  Yes you can deduct any employee pay you give a W2 and 1099NEC for subcontractors and cash you pay to other people on your Schedule C for self employment.    You don't give yourself a W2 or 1099NEC and can't deduct your own salary or any personal withdrawals you make from your business. As a sole proprietor, you are not an employee of the business.

     

    You need to file Schedule C in your personal tax return to report your 1099 self employed income.  Do you need help reporting it?  Do you use a payroll company to process the quarterly payroll reports and issue the W2s?  

     

    Employees Gross Wages goes on Schedule C line 26 Wages
    The employer portion of taxes goes on line 23 Taxes and Licenses

     

    IRS pub 334 Tax Guide for small businesses. See page 33 for employee expenses
    https://www.irs.gov/pub/irs-pdf/p334.pdf