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John is a self-employed computer consultant who lives and works in Dallas. John paid for the following activities in conjunction with his business. Which is not deductible in any amount?

1) 1 only
2) 2 only
3) 3 only
4) 4 only
5) None of the choices are correct

User Linh
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1 Answer

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Final answer:

John, a self-employed computer consultant, would not be able to deduct corporate income tax because he is likely operating as a sole proprietor and not as a corporation. As such, he pays individual income tax and self-employment tax, but corporate income tax is inapplicable.

Step-by-step explanation:

The question asks which expense, related to John's computer consulting business, is not deductible in any amount for tax purposes. The activity stated, number 5, is corporate income tax on his profits, individual income tax on his salary, and payroll tax taken out of the wages he pays himself.

As a self-employed individual, John would not be paying corporate income tax if he is operating as a sole proprietorship.

Sole proprietors typically report their business income and expenses on Schedule C, which is a part of their personal tax return, and they pay individual income tax and self-employment tax.

The payroll tax does not apply in a traditional sense, as he is not an employee of his own sole proprietorship, although he is subject to self-employment tax which covers Social Security and Medicare.

Therefore, the corporate income tax mentioned would not be deductible as John is not operating as a corporation.

User Korolar
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