Employer payroll taxes and the employer half of FICA belongs on Line 23, taxes and licenses.
Why line 23
The Social Security and Medicare tax you pay to match what you withheld from employees is your own cost, so it is deductible on line 23. The employee's half is not a separate deduction: it is part of the gross wages you already deducted on line 26, so deducting it again would double count it. The same applies to amounts you withhold for income tax, which are part of wages rather than a tax of yours.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so employer payroll taxes and the employer half of FICA lands on Line 23 without you sorting it.
Start for freeWhat employer payroll taxes and the employer half of FICA is confused with
- Line 26, wages
- Gross wages including everything withheld from them are line 26, while the employer taxes you pay on top of those wages are line 23.
- Schedule 1 line 15, schedule 1 line 15, deductible part of self-employment tax
- Tax on your own self employment earnings is never line 23; half of it is deducted on Schedule 1 line 15 instead.
- Line 14, employee benefit programs
- Line 14 is employee benefit programs such as health or education assistance, while statutory employer taxes on wages are line 23.
Examples that belong on line 23
- $4,590 of employer Social Security and Medicare tax on $60,000 of wages
- $1,147 of employer Medicare tax for the year
- A $382 monthly employer FICA deposit
- $215 of state employer payroll tax on a part time employee
- $0 deducted for the employee half withheld, because it is inside the line 26 wages figure
What does not belong here
- Amounts withheld from employee pay, which are already inside line 26 wages.
- Your own self employment tax, which is Schedule 1 line 15.
- Federal income tax withheld and remitted on behalf of employees.
- A late deposit penalty, which is not deductible.
The limit that applies
Reduce the line 23 deduction by any credit claimed for employer Social Security and Medicare taxes paid on certain employee tips.
What to keep
Keep the quarterly Form 941 filings, the payroll provider reports and the deposit confirmations. The payroll report separates the employer tax from the withheld employee tax, which is the split that matters here.
Other expenses on line 23
| Expense | Line |
|---|---|
| a city or county business license | Schedule C, Line 23 |
| a state franchise tax or LLC annual fee | Schedule C, Line 23 |
| a state professional license renewal | Schedule C, Line 23 |
| federal and state unemployment tax | Schedule C, Line 23 |
| personal property tax on business equipment | Schedule C, Line 23 |
| real estate property tax on a business building | Schedule C, Line 23 |
| sales tax you collected and remitted | Schedule C, Line 23 |
Related lookups
- Can I pay my child and deduct it on Schedule C?
- Where does self employment tax go?
- Where does employee health insurance go on Schedule C?
Sources
This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.
Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.
Stop looking up lines one at a time. ClaryBook totals your year into an IRS Schedule C worksheet in form order, Part I and Part II line by line, so employer payroll taxes and the employer half of FICA lands on Line 23 without you sorting it.
Start for free