Ask the Taxman- How do you record income tax payments in accounting?
Source: Quora
Answer:
Federal and state tax payments are not an expense of the business for a S Corp, Partnership or Sole Proprietorship. If you are an S Corp, it would be a shareholder distribution. If your are a Partnership, it would be a draw. If your are a Sole Proprietorship, it would just be a movement of money. All three of these forms of business, taxes are paid through the personal return.
Federal tax payments are not an expense of the business for a C Corp. State and local taxes paid or accrued are an expenses of a C Corp.
Requested by Julian Diep