Line 23 Schedule C - State Sales Tax paid - Business

larktam · ‎July 3, 2020

I am using the TurboTax Home and Business. Can I subtract the CA Sales tax paid from the Gross Income for my business? Under the Taxes and Licenses Expenses, it is not listed. How do I post?

If you look at the IRS instructions for Schedule C, states tax paid can be included on line 23 if it was included in gross income.

BillM223 · ‎July 3, 2020

Even though it is not explicitly listed, enter sales taxes under Taxes and Licenses (line 23).

Consider it a "Any other taxes imposed by city, state, county in order for you to conduct business".

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

larktam · ‎July 3, 2020

Will TurboTax update that in the future? I didn't include the state sales tax paid the previous years because it was not listed as an example.

BillM223 · ‎July 3, 2020

I will forward your suggestion.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

larktam · ‎July 3, 2020

Thanks! It will help Business owners reduce their federal tax liability since the state tax was paid.

https://www.irs.gov/instructions/i1040sc

Line 23
You can deduct the following taxes and licenses on this line.

State and local sales taxes imposed on you as the seller of goods or services. If you collected this tax from the buyer, you also must include the amount collected in gross receipts or sales on line 1.

BillM223 · ‎July 3, 2020

Yes, I am aware of that instruction, and we have told users for years to use line 23.

As for the Learn More examples, I will point that out. Thanks.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Line 23 Schedule C - State Sales Tax paid - Business

Business & farm

Business & farm

Business & farm

Business & farm

Business & farm