Payroll Tax Deposits
The Payroll Tax Deposits window keeps track of your current federal and state payroll tax liabilities. Go to Payroll > Payroll Tax Deposits.
Type
The type of column displays the type of tax deduction (941/943/940 for federal, the state abbreviation for state taxes). If you have both regular and agricultural employees, or have employees in multiple states, then you may need to scroll down to see all tax amounts.
Description
The tax description (obtained from the general ledger account description) is listed here.
Prior Month
This is the balance due at the end of the prior month.
Payments
This amount shows what payments have been made in the current month.
Curr. Month
This is the amount of payroll tax liability incurred in the current month.
Total Due
This is the total amount due at this time. This is calculated by taking the balance at the end of the prior month, subtracting payments made in the current month, and adding payroll liability incurred in the current month.
Amt to Pay
In this column, type in the amounts that you want to pay for each tax category.
Once you have entered the amounts to pay, the Print Checks button will be activated. Click on this button once you have entered all amounts to pay.
Tax Deposit Check Printing
The following window will appear when you click Print Checks on the Payroll Tax Deposit window.
The title bar of the window will indicate which tax you are paying (in this case, the federal Form 943 taxes.) Most of the entries necessary to print the check are already done, however you can change or override some settings:
Bank #
This is the bank account number to write the tax deposit check from. This will default to the bank account number for tax deposits in the Program Setup.
Name Key
The payee (either your bank or the state agency that collect taxes) must be set up in the vendor file. This federal and state tax rate files allows you to set up the vendor to use here, so that you don't need to type in the vendor's name key each time.
Transaction Type
Select either a check or an electronic transfer. If this is an electronic transfer, a miscellaneous charge will be created instead of a check. You will also be able to enter the EFT Confirmation number, and you won't need to enter a check number.
Check #
The next check number to use will appear automatically. You can override the check number if you need to.
Trans. #
If Electronic Transfer is selected in Transaction Type, this option will appear. Enter the Trans. #.
Check Date
This will default to today's date.
EFT Conf. #
If Electronic Transfer is selected in Transaction Type, this option will appear. Enter the confirmation number from the electronic transfer.
Rounding Adjustment
Because FICA, Medicare, SDI, SUI, and FUI rates use fractions of percents, the payroll tax accrual can develop rounding errors than can be corrected here. Enter a positive or negative amount here to correct the check total if necessary.
Save
Click on this button if you don't need a check printed out, but just need to record the payment.
Save & Print
Click on this button to save and print the check.
Cancel
Click on this button to close the window without saving the payment/check information.
Tax Deposits FAQ
I use electronic payments for my tax deposits instead of writing checks. How do I enter the tax deposits?
Click Print Checks on the Tax Deposit window as if you were writing a check. Then on the check entry window, select the Electronic Transfer option. This will create a miscellaneous transaction instead of a check.
The amount that is shown in the total due column is not correct. Why?
The amounts that appear on the Tax Deposit window are obtained directly from the general ledger. Normally, problems with balances in the Tax Deposit window are due to transactions that have been entered incorrectly in the general ledger. Possibilities include:
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Beginning balances were entered incorrectly. Because the correct amount was not entered, a balance could be left over or the Tax Deposits window might show an overpayment incorrectly. Check to make sure the beginning balances you entered when you started using the system are correct, and that the tax liability payments you made were expensed to the liability accounts where the starting balances were posted.
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A tax deposit check was entered manually and expensed to the wrong account. A common mistake is to expense a tax liability check to the tax expense account, when the amounts for taxes due have already been posted to the liability accounts.
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A current batch Payroll Journal needs to be printed and finalized. General Ledger transactions are not posted until the Payroll Journal is finalized. Therefore the liability for the last batch of payroll checks will not appear until the journal is finalized.
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A vendor invoice was entered for payroll taxes and expensed to the tax liability accounts. This is incorrect, since the payroll journal takes care of accruing the liabilities for payroll taxes. Vendor invoices should never be entered for the purpose of issuing a payroll tax check.
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Manual journal entries were posted to the payroll tax liability accounts. Be very careful when entering manual journal entries. It may be necessary at times to post manual transactions, for instance, if you forget to change your SUI rate at the beginning of the year causing the program to accrue the wrong amounts.
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A direct expense check or a vendor invoice was entered and expensed to the tax liability accounts when it should have been expensed to a different account.
Normally you can diagnose problems with the payroll tax balances by running a general ledger update on the account in question. This will show you the prior balance, all transactions during the month and the ending balance.
How do I void or delete a tax deposit payment?
Payroll tax deposit checks are direct expense checks. If the tax payment was entered as an electronic transaction, it will be a miscellaneous charge. You can view, delete, or void a payroll tax deposit check or miscellaneous charge just like any other direct expense check from the Checkbook Register window.