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I run a sole proprietorship with 3 employees. I pay SDI (State Disability Insurance) on their wages to the State Of California. This is basically a tax that the state mandates. It's about 1% of the total wages I pay to my employees.
Is this SDI I pay deductible on Schedule C?
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On your Schedule C, you will report the disability paid to the state as an expense (insurance) but you do not include the details which you report to the state. In addition, you would report her wages in the same manner as an expense.
SDI is taken from the employees wages NOT your pocket. When you report your employees gross wages as an expense, you've already deducted the SDI that's been paid in.
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