Payroll is important for business owners in managing their employees’ payment. Intuit has provided QuickBooks users with the facility, which helps them in adjusting payroll. Payroll is adjusted when there is any incorrect data, i.e., when the report of payroll liability shows an incorrect amount. After reading this blog, you will be able to adjust payroll liabilities in QuickBooks Desktop.
Adjusting payroll liabilities is not an easy task. Users are suggested to use this tool only if they understand accounting. If you need an accountant or any other help regarding this tool, call our QuickBooks experts at our toll-free number (800)-417-5147.
How to Adjust Payroll Liabilities in QuickBooks?
Many users often ask questions like “how to zero out liabilities in QuickBooks”, “how to clear payroll liabilities in QuickBooks”, “what to do if I have overpaid payroll tax liability” and “why there is negative payroll liabilities balance sheet?” on various QuickBooks Forums. Let us look at the appropriate answers.
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Step 1: Finding payroll discrepancies
Running a Payroll Checkup. This tool helps in finding problems that impact your liabilities.
The tool will:
Help you in Verifying your existing setup by scanning your payroll data for missing information and discrepancies.
Will also help in Reviewing employee records, wage and tax amounts and payroll item setup.
Identifying the amount of tax discrepancies on flat-rate tax. This tool will give suggestions on how to resolve the problem.
Running a Payroll Summary report for that quarter which you need to adjust. Note down the amount on the Payroll Item or items which need adjusting.
Step 2: Adjusting your payroll liabilities
Go to the Employees menu > Payroll Taxes and Liabilities > Adjust Payroll Liabilities.
By using these tips, complete the fields.
Provide the same date as the last paycheck of the affected quarter. Use today's date if you’re working on the current quarter.
The Effective Date is used for calculating amounts on your 940 and 941 forms as well as the Payroll Liability Balances Report.
Choose the employee.
Fill out the Taxes and Liabilities fields.
Click on the Item Name you want to adjust.
Fill the amount of the adjustment. Use a positive number to increase or negative to decrease the amount.
Wage Base is hardly needed, even in case you override a tax amount on a paycheck.
You only use Income Subject to Tax at the time of making a wage base adjustment.
Choose Accounts Affected and then click on OK.
Choose Do not affect accounts to leave balances unchanged for the liability and expense accounts. The adjustment will only change the YTD amounts on your payroll reports.
Click on Affect liability and expense accounts to enter an adjusting transaction in the liability and expense accounts.
Repeat the same procedure for other employees if you need to, and click on OK.
Conclusion
This brings us to the end of this blog. Hope you understood how to adjust payroll liabilities in QuickBooks. For any query, call our QuickBooks experts at our toll-free number (800)-417-5147.
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