Is estimated tax payments not deductible or line 23?

Line 23 is for taxes the business bears, the employer share of payroll tax, personal property tax on business assets, sales tax remitted and licences, never your own income or self-employment tax.

Is estimated tax payments not deductible or schedule 1 line 15?

The deductible part of self-employment tax is a genuine adjustment on Schedule 1 line 15, which is a deduction computed on Schedule SE and has nothing to do with how much you paid in during the year.

Where do estimated tax payments go? Not Deductible

Q: Where do estimated tax payments go?

Estimated tax payments is not deductible on Schedule C. Quarterly estimated payments are payments against your own tax bill, not business expenses, so they are not deductible and they do not belong on Schedule C anywhere. They are reported as payments on Form 1040, where they reduce the balance due rather than reducing income. Deducting them on line 23 is a circular error: it would lower the net profit that the tax was computed on. The only part of your self-employment tax that produces a deduction is the deductible part, taken as an adjustment on Schedule 1.

Short answer Not deductible

Estimated tax payments is not a deductible business expense.

Why it is not deductible

Quarterly estimated payments are payments against your own tax bill, not business expenses, so they are not deductible and they do not belong on Schedule C anywhere. They are reported as payments on Form 1040, where they reduce the balance due rather than reducing income. Deducting them on line 23 is a circular error: it would lower the net profit that the tax was computed on. The only part of your self-employment tax that produces a deduction is the deductible part, taken as an adjustment on Schedule 1.

Log it once, with the line already on it. Type an expense in plain words in ClaryBook and it is filed with a date, vendor, amount and what it was for, so the number your preparer needs for estimated tax payments is already written down.

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What estimated tax payments is confused with

Line 23, taxes and licenses: Line 23 is for taxes the business bears, the employer share of payroll tax, personal property tax on business assets, sales tax remitted and licences, never your own income or self-employment tax.
Schedule 1 line 15, schedule 1 line 15, deductible part of self-employment tax: The deductible part of self-employment tax is a genuine adjustment on Schedule 1 line 15, which is a deduction computed on Schedule SE and has nothing to do with how much you paid in during the year.
Line 16b, interest, other: Interest and penalties charged on underpaid federal tax are also not deductible, so they do not become interest expense on line 16b.

Examples people try to deduct here

$2,500 paid each quarter on Form 1040-ES: reported as payments on Form 1040, deducted nowhere
$1,100 of state estimated income tax: a personal payment, deductible only as a state tax itemised deduction if you itemise
$3,200 of employer payroll tax on an employee: line 23 on Schedule C
$190 underpayment penalty: not deductible
A $4,000 refund received: not income

What does not belong here

Estimated payments on line 23 or in Part V.
Federal income tax of any kind as a Schedule C expense.
Underpayment interest and penalties as interest on line 16b.
Treating a tax refund as business income.

What to keep

Keep the payment confirmations with dates and amounts, and check them against the IRS account transcript before filing. They support the payments section of Form 1040, not any Schedule C line.

Other things that are not deductible

Expense	Line
a business suit	Not deductible
a government fine or penalty	Not deductible
a parking ticket	Not deductible
a personal expense on the business card	Not deductible
a spouse's airfare on your business trip	Not deductible
a traffic ticket	Not deductible
an unpaid invoice	Not deductible
commuting mileage	Not deductible
country club dues	Not deductible
federal income tax	Not deductible
groceries for your home	Not deductible
interest on underpaid federal income tax	Not deductible

Related lookups

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.

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