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IRS.gov Website
Publication 334
taxmap/pubs/p334-031.htm#en_us_publink1000313555

Taxes(p36)

For Use in Tax Year 2013
rule
You can deduct on Schedule C or C-EZ various federal, state, local, and foreign taxes directly attributable to your business.
taxmap/pubs/p334-031.htm#en_us_publink1000313556

Income taxes.(p36)

For Use in Tax Year 2013
rule
You can deduct on Schedule C or C-EZ a state tax on gross income (as distinguished from net income) directly attributable to your business. You can deduct other state and local income taxes on Schedule A (Form 1040) if you itemize your deductions. Do not deduct federal income tax.
taxmap/pubs/p334-031.htm#en_us_publink1000313557

Employment taxes.(p36)

For Use in Tax Year 2013
rule
You can deduct the social security, Medicare, and federal unemployment (FUTA) taxes you paid out of your own funds as an employer. Employment taxes are discussed briefly in chapter 1. You can also deduct payments you made as an employer to a state unemployment compensation fund or to a state disability benefit fund. Deduct these payments as taxes.
taxmap/pubs/p334-031.htm#en_us_publink1000313558

Self-employment tax.(p36)

For Use in Tax Year 2013
rule
You can deduct one-half of your self-employment tax on line 27 of Form 1040. Self-employment tax is discussed in chapters 1 and 10.
taxmap/pubs/p334-031.htm#en_us_publink1000313559

Personal property tax.(p36)

For Use in Tax Year 2013
rule
You can deduct on Schedule C or C-EZ any tax imposed by a state or local government on personal property used in your business.
You can also deduct registration fees for the right to use property within a state or local area.
taxmap/pubs/p334-031.htm#en_us_publink1000313560

Example.(p36)

May and Julius Winter drove their car 7,000 business miles out of a total of 10,000 miles. They had to pay $25 for their annual state license tags and $20 for their city registration sticker. They also paid $235 in city personal property tax on the car, for a total of $280. They are claiming their actual car expenses. Because they used the car 70% for business, they can deduct 70% of the $280, or $196, as a business expense.
taxmap/pubs/p334-031.htm#en_us_publink1000313561

Real estate taxes.(p36)

For Use in Tax Year 2013
rule
You can deduct on Schedule C or C-EZ the real estate taxes you pay on your business property. Deductible real estate taxes are any state, local, or foreign taxes on real estate levied for the general public welfare. The taxing authority must base the taxes on the assessed value of the real estate and charge them uniformly against all property under its jurisdiction.
For more information about real estate taxes, see chapter 5 in Publication 535. That chapter explains special rules for deducting the following items.
taxmap/pubs/p334-031.htm#en_us_publink1000313562

Sales tax.(p37)

For Use in Tax Year 2013
rule
Treat any sales tax you pay on a service or on the purchase or use of property as part of the cost of the service or property. If the service or the cost or use of the property is a deductible business expense, you can deduct the tax as part of that service or cost. If the property is merchandise bought for resale, the sales tax is part of the cost of the merchandise. If the property is depreciable, add the sales tax to the basis for depreciation. For information on the basis of property, see Publication 551, Basis of Assets.
EIC
Do not deduct state and local sales taxes imposed on the buyer that you must collect and pay over to the state or local government. Do not include these taxes in gross receipts or sales.
taxmap/pubs/p334-031.htm#en_us_publink1000313564

Excise taxes.(p37)

For Use in Tax Year 2013
rule
You can deduct on Schedule C or C-EZ all excise taxes that are ordinary and necessary expenses of carrying on your business. Excise taxes are discussed briefly in chapter 1.
taxmap/pubs/p334-031.htm#en_us_publink1000313565

Fuel taxes.(p37)

For Use in Tax Year 2013
rule
Taxes on gasoline, diesel fuel, and other motor fuels you use in your business are usually included as part of the cost of the fuel. Do not deduct these taxes as a separate item.
You may be entitled to a credit or refund for federal excise tax you paid on fuels used for certain purposes. For more information, see Publication 510, Excise Taxes.