You are mixing up INCOME taxes with PAYROLL taxes ... the corp pays payroll taxes on the payroll tax forms NOT on the 1120-S. An S-corp will never owe INCOME taxes ... those are paid on the personal return. Payroll taxes are ONLY deducted on the corporate return.
When S corp pay IRS following on behalf of employee:
- Quarterly returns ( Form 941)
which includes estimated Federal Tax withheld from employee, Medicare & Social Security The gross wages are deducted + the employer's portion of the FICA taxes not just the 941 totals - Annual Return FUTA Tax (Form 940)
- Any State Unemployment Tax (This doesn't goes to IRS)
These are ALL corporate deductions on the 1120-S along with the wages paid.
I understand employee can deduct estimated Federal Tax , Medicare & Social Security reported on W-2 and Form 941. NO ... an employee cannot deduct them ... the W-2 is entered in the program and the wages & withholdings are placed on the correct lines of the 1040. FICA taxes have never been deductible on a personal return.
Note: On 1120 S Form , under Payroll deductions, I already deducted employer's portion of medicare, SS , FUTA and state unemployment taxes. That is what you are supposed to do.
May I suggest you seek out a local payroll company or bookkeeper to be educated on these matters if you don't get an A HA moment soon.
