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Level 1

Deducting half of your social security tax

Hey, my wife and I are new to quickbooks (and managing our new sole proprietorship). So we are trying to understand how we deduct the business's half of FICA. Does Quickbooks give a break down of what your quarterly payments represent (what part is federal what parts if FICA) or do you calculate this yourself? Thanks in advance for any help you guys can provide. 

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Level 15

Deducting half of your social security tax

the business does not pay any kind of SS or payroll taxes when you are a sole proprietor

 

you should download the instructions and forms for the 1040-ES from the IRS web site.  That is quarterly estimated taxes, and it has a worksheet you fill out, those quarterly tax payments will include SS.

 

When you file annual taxes, the tax form will show the total SS amount due, and it will also credit back half of it.  The annual tax form 1040 & schedule C, will post to your SS earnings record with the SS administration

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