Payroll Taxes Tax Deductions

The employer portion of payroll taxes is a deductible business expense. Includes Social Security, Medicare, federal and state unemployment taxes.

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check_circleWhat You Can Deduct

  • checkEmployer Social Security tax (6.2%)
  • checkEmployer Medicare tax (1.45%)
  • checkFederal unemployment tax (FUTA)
  • checkState unemployment tax (SUTA)
  • checkPayroll processing service fees
  • checkWorkers compensation insurance premiums

lightbulbTips for Keeping Records

  • tips_and_updatesOnly the employer portion of payroll taxes is deductible — not withholdings
  • tips_and_updatesFile Form 941 quarterly to report payroll taxes
  • tips_and_updatesLate payroll tax deposits incur steep penalties — automate payments
  • tips_and_updatesKeep payroll records for at least four years

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