When deduct 4th quarter payroll taxes

[peter8]

I paid my 4th quarter 2015 social security, medicare, and state and federal unemployment taxes in January of 2016. Can I deduct these on my 2015 schedule C?

[cold1460]

what if i closed the business in 2015

[dksolotky · Accepted solution]

It depends upon whether you are cash basis or accrual.  Accrual taxpayers accrue the expense in the current year while cash basis taxpayers deduct the expense in the year paid.

[k371]

However if the accrued payroll expense had salary paid to the business owner (S-Corp shareholder or related party, or equivalent in a partnership etc.) then the salary cannot be deducted from what I know. Not sure if the associated payroll taxes can be deduced in that case.