Employee Wages Tax Deduction
Many successful sole proprietors reach a point when they can no longer do everything on their own. To continue to grow, often times solo entrepreneurs will hire employees to assist with the workload. While contractors and employees may carry out similar tasks, a key distinction between independent contractors and employees is that you have control over what your employees do and how they carry out their job. In addition to paying wages, hiring an employee comes with some additional responsibilities including paying employer payroll taxes and filing related reports. The good news is employee wages will almost always be a deductible business expense on your Schedule C.