Payroll Taxes (under Compensation & Benefits)

[Danno35]

Hello,

I hope someone could help me.  I'm doing my Turbo Tax (Business) return and a few responses to someone and wanted to get clarification.  Under Compensation and Benefits is "Payroll taxes".  Where do I get the information (amount) to enter for this area?  Is it in my 941s and is it line 13 for the total for Federal income tax withheld for wages, compensation and Medicare and social security or is it just line 5e (only for social security and Medicare taxes)?  

Lastly, I live in Florida and Turbo Tax is prompting me to file a Florida Corporation Income Tax Return.  I researched this, but I don't' think it's correct.  I'm a single member LLC approved to be tax as an- S-Corp. I'm not a corporation. I did receive FL Dept. of Revenue Employer's Quarterly Reports, but only the first quarter had an amount ($189) other quarters are $0. Do I have file with the state?  I did Google this and read that it's only required once- doesn't sound right.  Thank you in advance.  Dan

[RobertB4444 · Accepted solution]

Payroll taxes are on your 941s but they don't have a separate line item.

If you're using the 941 to calculate your payroll tax it is the total of half of the amount of social security and medicare reported in box 5 of your 941 minus any amounts reported on lines 7 thru 9 or 11.

Basically, you take social security and medicare out of your employees paychecks.  Then, when you file your 941, you have to pay a matching amount of that into the system on your employees' behalf.  That's what you get to deduct.

You also get to deduct the gross wages that you pay which include their share of social security and medicare as well as any withholding tax.

The easier way to get them (provided you don't have any amounts on lines 7 - 9 or 11 of the 941) is to take the amounts from box 4 and box 6 of your W-3 and add them together.

As to your second question, all businesses in Florida are required to file a Florida Corporate Income/Franchise Tax return every year.  It is done on form F-1120.  It's due by May 1st if you don't have a fiscal year.

Here is the information on Florida's Corporate/Franchise return.

@Danno35 

[Danno35 · Accepted solution]

Thank you very much for a very detailed explanation and clarification.  I really appreciate it.  I double-checked under both options you provided, and the result is the same so I'm good to go regarding payroll taxes.  As for the state filing F-1120, Turbo tax is going to charge me $50 and as I mentioned only the first quarter shows an amount of taxes due as other quarters have no amount.  Is it worth it, again first time filing as an S-corps so I'm not sure how easy the state form will be. I was thinking of e-filing it myself through the IRS website.  Thanks again for helping me out.  Take care.

[RobertB4444 · Accepted solution]

You can't file the Florida form through the IRS website.  You should take a look at the form on the Florida website and you can decide whether you can complete it on your own there.  Use the link I provided above (or this one - same link) and decide whether you need the TurboTax software or not.

@Danno35 

[Danno35]

Sounds good and thank you for the link.  I'll take a look and see how it is. In the end I may just do it through Turbo Tax and keep things organized under one platform.  Looks like I'm almost ready to file, just have to go over things one more time.  Oh, and I did want to ask you about one last thing called QBI (Qualified Business Income) deduction. I reviewed the three criteria areas (1. must be a business, 2. US Based, and 3. Income must not be "wages") on Turbo Tax to determine if my small business qualifies for the deduction.  It's number 3 that's confusing to me.  How could "wages" not be part of income.  Unless I'm misunderstanding term "wages" for my situation.  I read that "wages" is meant for a C-Corps or other forms of businesses, like foreign currency gains, capital gains, property, etc...  The article read that the QBI deduction is primarily for small businesses, self-employee "pass-through" income. Since I'm a small business taxed as an S-Corps and it is pass-through to my personal income tax return I should select "Yes, this income is QBI" to the question correct.  Thank you.

[DaveF1006]

No.  Wage income is not eligible to be included in a QBI deduction. Please read the following IRS source that confirms this fact. Read the section that mentions QBI does not include items such as:

 Qualified Business Income Deduction

[Danno35]

Ok, I understand about wages, but based on a CPA's video which addresses QBI and how it works with an LLC taxed as an S-Corp the Turbo tax program or any tax program will apply the numbers accordingly to exclude the W2 wages and only apply the 20% deduction to business income.  Everything I've read and viewed indicates my business income qualifies for QBI.