I’m a sole proprietor running payroll for assistants, who help me out a few times per year. I receive invoices from my payroll service that break down into: Employee Salary + 25% Payroll Taxes & Handling.
Does the whole invoice go into one expensive category or do I have to split it up? Which expense category/categories does it belong to?
Did the payroll service provide a breakdown between gross salaries/wages and their service charge ("handling")?
The total (gross) salaries/wages would be reported as such on Line 26 of Schedule C (or as employee wages in TurboTax).
The charge for the payroll service would most likely be reported as Legal and Professional Services.
Did the payroll service provide a breakdown between gross salaries/wages and their service charge ("handling")?
The total (gross) salaries/wages would be reported as such on Line 26 of Schedule C (or as employee wages in TurboTax).
The charge for the payroll service would most likely be reported as Legal and Professional Services.
@Anonymous_Thanks!
Payroll Taxes and Commission on Gross Wages is one item on the invoice and not broken down. However according to my contract with the payroll service the 25% break down to: Payroll Tax Processing Fees: 15.85%; Workers Compensation Insurance: 6.15% and Admin Fee: 3.00%. Do I have to calculate that and put them different categories (which ones) or could the 25% be all Legal and Professional Services?
Gross wages is self-explanatory, but I have no idea what they are charging for their services.
What is the "Admin Fee" and the "Processing Fee"?
The worker's comp would be entered separately.
I guess "Admin Fee" and the "Processing Fee" is how they make their money? I'm thinking this could be "Legal and professional fees" in TurboTax?
@Patrick_S76 wrote:
I guess "Admin Fee" and the "Processing Fee" is how they make their money? I'm thinking this could be "Legal and professional fees" in TurboTax?
Yes, that would be correct if those charges relate to accounting services.