Dear Community,I am filing my tax in State of Washington and I paid State Excise Tax for my sole proprietorship. How and where I should enter those taxes in TurboTax?

Forum|Forum|1 year ago
August 24, 2024
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TomD8

Employee

Excise taxes that are ordinary and necessary for the conduct of your business should be entered on Line 23 of your Schedule C:

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

**Answers are correct to the best of my ability but do not constitute tax or legal advice.

taxman2011Author

Thanks, I entered into line 23 of schedule C. I had it before as a separate custom line "State Excise Tax". My question is, any deduction in this form is against your income tax based on you tax bracket, while the state excise tax I paid should be deducted from tax directly as $ to $ not % of that.

For example: I own $4000 tax and I paid $2500 excise tax. thus I should paid $1500. But the line 23 only deduct 20% of $2500 = $500 from $4000

Am I wrong?

TomD8

Employee

Schedule C determines the net profit (or loss) from your sole proprietor business. The net profit (or loss) is then applied to your Form 1040. Thus you may not receive a dollar-for-dollar benefit from a single line item expense on your Schedule C.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.