S Corp. 2 employees. Me & partner. What do I show for Payroll Deductions?

[na5kar]

I have an accountant for monthly payroll. I write two payroll checks at $200 each. Accountant bases our income on $250 / month. He sends me 941 quarterly form and instructions what to pay each qtr. On 941, Line 2 Wages $1500. Line 3 Fed Inc Tax Withheld $185.22.  Line 5a Column 2 SS tax withheld $186.00. Line 5c Medical withheld $43.50.  He said that I should list wages as $6000 ($250 x 2 for 12 mos).  What part of withheld amount (sent to govt) do I deduct?

[JulieCo · Accepted solution]

You should enter the gross pay amount (the $6,000) as compensation expenses in TurboTax and then can enter the employer portion of the FICA/MCARE as payroll taxes in TurboTax which would be 1/2 of the $186 for SS (or $93) and 1/2 of the $43.50 Medicare (or $21.75).

The remaining amount of taxes withheld are the employee portion which reduces their net pay to the $200/month so those are not deductible expenses to the SCorp.

[na5kar]

Thank you so much!  You have a perfect understanding of my question and you explained the answer flawlessly.  I now understand 'Exactly' how to do what I need to do.  Thank you!

[JulieCo]

You are welcome!