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mybestfriends1
New Member

Are taxes reported on w3 all employer portion of taxes and are employer paid Rica taxes deductible

I am trying to determine which payroll taxes are deducible. I am the owner of a small business with 9 employees. Are the taxes reported on w 3 deductible and are they employer paid or are only 1/2 of these amounts deductible.
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Accepted Solutions
SusanH
New Member

Are taxes reported on w3 all employer portion of taxes and are employer paid Rica taxes deductible

No the amount on the W3 is the total of all employee withholding meaning the taxes that were withheld from the employees paychecks, the withholding that you held in trust and then remitted to the IRS. While this should also be the amount of social security and medicare that the employer paid, they should not be thought to be the same thing. 

The W3 is a totaling sheet for all of the W-2's you issued and doesn't really have anything to do with the employer portion of the payroll taxes.

The employer portion of Social Security (FICA), Medicare and Unemployment Taxes are deductible. There may be other payroll taxes that are deductible depending upon where your business is located.

So succinctly put, if your payroll was calculated properly, then the employer portion of social security and medicare would be the same amount that appears on the W3. State and local amounts on the W-3 are strictly employee withholding and are not deductible.

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3 Replies
SusanH
New Member

Are taxes reported on w3 all employer portion of taxes and are employer paid Rica taxes deductible

No the amount on the W3 is the total of all employee withholding meaning the taxes that were withheld from the employees paychecks, the withholding that you held in trust and then remitted to the IRS. While this should also be the amount of social security and medicare that the employer paid, they should not be thought to be the same thing. 

The W3 is a totaling sheet for all of the W-2's you issued and doesn't really have anything to do with the employer portion of the payroll taxes.

The employer portion of Social Security (FICA), Medicare and Unemployment Taxes are deductible. There may be other payroll taxes that are deductible depending upon where your business is located.

So succinctly put, if your payroll was calculated properly, then the employer portion of social security and medicare would be the same amount that appears on the W3. State and local amounts on the W-3 are strictly employee withholding and are not deductible.

Carl
Level 15

Are taxes reported on w3 all employer portion of taxes and are employer paid Rica taxes deductible

Generally (I did not say "always") all taxes paid by a business are deductible by the business. But one thing (of many things) that can affect this in different ways is what is checked in box b of the W-3. Because of the questions you're asking and the way you worded it, that makes it quite apparent (at least to me) that this is your first time dealing with this. I highly suggest you seek professional help for at least this first year dealing with this. Doing things wrong will be costly in the form of fines and penalties. If your state also taxes personal income then you can double those fines and penalties.

Critter
Level 15

Are taxes reported on w3 all employer portion of taxes and are employer paid Rica taxes deductible

You should not be getting figures off the W3 to complete the return ... they should come from your bookkeeping records.  Please seek local professional help to make sure you are doing things correctly and get educated.  Payroll anything is nothing you want to mess up as the headache to get them corrected goes on for months and then there are the penalties. 

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