Dear Community, I am filing my tax in State of Washington and I paid State Excise Tax for my sole proprietorship. How and where I should enter those taxes in TurboTax?

[TomD8]

Excise taxes that are ordinary and necessary for the conduct of your business should be entered on Line 23 of your Schedule C:

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

[taxman2011]

Thanks, I entered into line 23 of schedule C. I had it before as a separate custom line "State Excise Tax". My question is, any deduction in this form is against your income tax based on you tax bracket, while the state excise tax I paid should be deducted from tax directly as $ to $ not % of that.

For example: I own $4000 tax and I paid $2500 excise tax. thus I should paid $1500. But the line 23 only deduct 20% of $2500 = $500 from $4000

Am I wrong? 

[TomD8]

Schedule C determines the net profit (or loss) from your sole proprietor business.  The net profit (or loss) is then applied to your Form 1040.  Thus you may not receive a dollar-for-dollar benefit from a single line item expense on your Schedule C.

[Hal_Al]

Q. For example: I own $4000 in federal income  tax and I paid $2500 excise tax. Thus I should only pay $1500, in federal income tax. Am I wrong? 

A. Yes, that is wrong. 

Although the $2500 is a "tax", for purposes of your business tax return (Schedule C), it is only a deduction from your business  income.  That is, your business profit will be reduced by $2500 and you will pay tax (both federal income tax and self employment tax) on $2500 less income.  So  ~$500 sounds about right.