qbteachmt
Level 15

The problem you have is Mixed Perspective. The 941 is Payroll, not income tax reporting. For instance, tips paid to servers by customers in a retail establishment are not expense for the business, if they have a POS system that tracks appropriately. That's why taxable compensation on the 941 line 2 is not by definition the wage expense for the business owner. You won't look to line 3 at all; that's already part of gross wages.

If it is a small business without lots of provisions and there is no employee reaching the SS limit or the additional Medicare limit, no tips, FMLA, etc, then you can typically use the 941 lines 5a through d, but any line where you see .124, split it in half to get .062 (employer share only) and the .029 becomes .0145. Or, maybe not.

This is not something easily back-calculated from the 941. Whoever has provided the 941 should also have access to the reporting you need, and you should cross-reference it to the Income Statement, to confirm they didn't (for instance) dump Owner Draw into Compensation expense.

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