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Ask Dr. Fiona Chen Your Own Question
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 482
Experience:  Former IRS Revenue Agent
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I owe back taxes of about $77,000 and am on a payment plan

Customer Question

I owe back taxes of about $77,000 and am on a payment plan with the IRS. I am an S-CORP. I am paying myself a salary of $75,000 with all taxes being paid for the year. However, I still need to pay the monthly amount of past due money which I cannot pay with the $75,000. So, I have a pass through "profit" of an additional $25,000 from the SCORP that I can pay the IRS past due with. The question is, do I tax myself on the additional $25,000 or can the past due IRS payments be counted as a deduction of some kind.
Submitted: 10 months ago.
Category: Tax
Expert:  Dr. Fiona Chen replied 10 months ago.

Dear Customer,

Please clarify what you meant by "do I tax myself on the additional $25,000".

Whether the tax you pay can be deducted depending on which type of tax. Payroll taxes you can deduct. However, if you deducted it before, you cannot deduct it again. The interest you pay is deductible. The penalty is not deductible on tax return.


Fiona Chen, MPA, PH.D., CPA, ABV, CFF, CITP