topic Louisiana Late Payment Interest on Payroll Withholding, Deductible or Not? in Deductions & credits

Louisiana Late Payment Interest on Payroll Withholding, Deductible or Not?

Mlemm2012 — Mon, 26 Aug 2019 14:33:40 GMT

Is the interest paid to Louisiana state for late withholding taxes on my payroll a deductible expense for my business? What about late interest paid on sales tax? So, I know the penalties can not be used as an expense, but is the interest I paid deductible? Can I please get a rev doc or some kind of legal doc stating the answer to this.

Re: Louisiana Late Payment Interest on Payroll Withholding, Deductible or Not?

Kat — Tue, 27 Aug 2019 03:13:15 GMT

I've looked for a specific publication to verify the info included in the article linked below. I haven't been able to locate a specific revenue code (either federal or state). However, most states follow the federal rules for deductions of business expenses.

That said, I don't believe you'd be able to expense either the penalties OR the interest on late payment of payroll withholding taxes in Louisiana. It would be most unusual for the IRS to disallow expensing a penalty but allow deduction of the interest related to the penalty.

I'll keep looking. But check out the article linked below, which was the one I found most helpful in response to your question.

https://taxes.lovetoknow.com/tax-deductions-credits/is-interest-deductible-tax-penalties

Re: Louisiana Late Payment Interest on Payroll Withholding, Deductible or Not?

Carl — Tue, 27 Aug 2019 22:21:50 GMT

While the interest deduction is questionable, I do know that a tax deduction for late payment penalties on either state or federal taxes is flat out not deductible on the federal return.