 QuickBooks Desktop 2023. Pay payroll taxes. Let's do it within 2-its. QuickBooks Desktop 2023. Support Accounting Instruction by clicking the link below, giving you a free month membership to all of the content on our website, broken out by category, further broken out by course, each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. Here we are in QuickBooks Desktop. Get great guitar's practice file. We started up in a prior presentation. Going through the setup process we do every time. Maximize the home page, the view dropdown. We got the hide icon bar, open windows list checked off, open windows open on the left. Reports dropdown, company and financial. Let's look at that P&L profit and loss change in the range. Oh, one, oh, one, two, three, twelve, thirty, one, two, three, and then customize fonts and numbers, changing it to 14. Okay. Yes, and okay. Reports dropdown again, company and financial. This time the balance sheet report and we'll go ahead and customize it and run it for a one, oh, one, two, three to twelve, thirty, one, two, three and then customize with the font and numbers and bring it to 14. Okay. Yes, and okay. That's the setup process we've been going through every time. If we go back to the home page, we're now going to be paying off the payroll liabilities using the pay liability form, which in essence will create a kind of check. The check form being the form that decreases the cash account. So even if we do an electronic transfer, we think of the check form as the form decreasing the checking account. But we're going to use a special check form over here as opposed to simply writing the check up here. Now we process the payroll last time and then we're going to be paying the liabilities just recapping the payroll process in general. First, you want to think, do I want to process payroll within QuickBooks or do I want to process payroll using a third party payroll provider? If you do it within QuickBooks, you probably want to pay for it, although for our practice problem, which is a great tool for practice problems, we went to edit preferences, we went to payroll, we went to company preferences, turned on the payroll here, set up our payroll items, and we can see closing this out that the payroll has been set up in some way because we'll have this little arrow down at the bottom if it is set up. And then in the prior presentation, we processed payroll using the pay employee ease form, which is also a form that generally makes basically check type forms for the employees that we have. Even if we make electronic transfers, the end of the day the check form is the type of form that shows a decrease to the checking account. However, these are going to be complex check forms in terms of the journal entry created because we also had the withholdings that were required, federal income tax, social security, Medicare in our case. So note the general cycle that you will have for payroll is you might enter the time, but you don't necessarily need that. You might track the time in some other way, and then you will process payroll generating the forms that will be going out to the employees, the payments to the employees, and that will be dependent in part on your choice as to whether it's going to be weekly. These are the general choices or biweekly, semi monthly or monthly. We chose monthly here as we process the payroll. We're going to increase liabilities for the amounts of withholdings we took from the employees as well as our payroll taxes. And we might have other things like voluntary withholdings 401k plan or health plan, for example, and state taxes too. But we're just going to deal with federal income taxes. And then at some point after we process payroll, which might be dependent in part on your particular circumstances, how much payroll you have and do you have any state obligations and so on, we will have to then pay the employees. Now you can go into your particular circumstances in more detail by going to iris.gov when you set up your employee identification number and all that kind of stuff, then you can you can drill more down on your specific requirements. But the general idea is in our case we process monthly. We're going to have to make the payments for the liabilities that we incurred when processing payroll at some point after that. We're going to imagine by the end of the next month, for example, although it might be generally sooner than that, but anytime after the process, the payroll. So we're going to go back on over here. We've got in our balance sheet here, we got liabilities on down below. We put all of our liabilities into one account. You don't necessarily have to do that. You might set up your payroll to have multiple liability accounts, possibly breaking out FICA taxes, social security, Medicare, federal income taxes. Maybe if you had state taxes, you might put them in another account or you might choose to put them all in one account. You can go through those options and change them by going to the list dropdown item list. I'm sorry, you can go to the list dropdown and the payroll item list, and you can change those items in a similar fashion as we did with the payroll taxes, breaking out the expenses of payroll taxes versus payroll expense. You can do a similar thing on the liability side. We put them all in one group, but we might be processing multiple checks, of course, to pay off that one liability because they might be going to different places, for example. So that's the idea. So now we're at a place where it's just basically a liability here. It's similar to having the accounts payable and we just got to pay it off with a check. But if I go back to the homepage instead of using like a pay bill check, we're going to use a pay liability check here. So let's use this little widget. Now it's a little bit wonky to use the widget here because of the manual payroll. So bear with me, we might have to add like a couple vendors to do this. But in any case, we're going to say, I'm going to say it's a custom. And I'm going to say this is going to go from, I'm going to imagine just January. So I'm going to say 01.01.23 to 01.31.23. And this says select date range for the payroll liabilities you want to pay. I want to pay the payroll liabilities incurred for the payroll report processed in January. And then I'm going to pay them by the end of February is the idea here. And then I'll say okay. And so there we have it. So we've got the payroll liabilities to be printed. And I'm not going to say no to be printed. They're going to come out of the checking account the date of the check. Let's make 022823 and then review liability check to enter expenses create liability. I'm going to review them. That's fine. The dates we're going to say there's the date of the liabilities that should be generated. Let's look at our liability report real quick reports drop down and go to the go to the payroll liability. Let's go to the payroll summary report and make this from 01.01.23 to 01.31.23. I'm going to make it a little bit larger so we can see it fonts and numbers. And let's bring this up to let's say 11. Okay. Yes. And okay. So we've got the payroll liability. Let's pull out the trustee calculator here real quick trustee calculator. And so we've got the payroll liability you would expect when we process the payroll. I can think about these two employees as if they're one employee, right? And I can look at this liability and say, okay, this is what we withheld. 15554.23 plus the our liability 474.23. That's going to give us the 2028. Let's go back to our balance sheet and let's run this balance sheet for a side by side two month. So I'm going to go to customize reports up top and say let's make this from January to 02.28.23. And I'm going to say run it by a month by month basis. And then okay. So if I go down to my liabilities, then there's the 2028. So there's the liabilities that were incurred in January that we're going to be paying now after processing it. So now let's go back to my pay liabilities. And if I look at the total down here, we get down to the 2028.46. Now this is where it gets a little bit wonky. I'm going to have to check all of them off. Now notice again, we're only really looking at at the federal income tax withholdings and we're not dealing with the federal unemployment tax because there's kind of low thresholds for caps on it. And I don't want to get into that right now. So so but you might also have state taxes and you might also have other withholdings that you have to deal with that are voluntary 401k plan and so on. Okay, so I'm going to check these off. Now as I do it says payroll item has no liability agency. So I'm going to make a generic agency to pay these things off. In practice, you might have to set up an electronic transfer kind of thing to set it up. And that's part of the you might be able to if you have to pay payroll might make that a little bit easier. But I'm just going to make make up an agency here. And so I'm going to say enter the name of the federal withhold tax payroll item payroll item is inactive. I'll say next enter the name of the agency. And I'm just going to say federal. Let's just say treasure treasury or let's say US Treasury US. Treasury Treasury and I'm just going to make this up and I'm going to say this is for FIT. I'm going to make a different one for each for each item. So I'm going to say US Treasury because I think this is where the payroll gets a little bit wonky on the manual payroll. So that looks good liability account payroll liability. So I'm going to say, OK, that looks good. And then US Treasury is not in the vendor list. So I'm just going to quick add it here and that'll make a separate check to them. So I'm going to say, OK, enter name of the agency. OK, there's that it's going to be salary and hourly. OK, and so there is that one. I'm going to do the same thing here. I'm going to say yes, this is a bit tedious next. And I think I need to make a different one for each because this is where it gets a little bit weird. And I want to make a separate check because I think that's how it shows up for our bank rec. So bear with me on this. This will be Medicare company. And I'm going to say quick add next next. I think that looks good and finished. And then that one. Let's do the Social Security. I'm going to say boom, Social Security next. And then I'm going to change this to SS company and OK, next, next, next, next, finished. So I think that is good. I'm not sure if they're going to. OK, so that looks good. I'm trying to group the checks in such a way that they're going to show up on the bank statement that we have created already. That's why I'm trying to set these up separately. So hopefully that'll work out. So we're going to say, let's create this thing. Let's create it. So now you've got this, the multiple checks here, right? So you got the U.S. Treasury for the federal income tax component. And let's actually go into our checks by going to the banking dropdown and use register, use register. And so now I made a separate check here for the FIT and it looks like it paid the combined the employer and employee portions. I think of Medicare and the employee and employer portions of the Social Security. Now notice that all three of these are in essence going to the federal government, but they should be going to different kind of places in the federal government. And again, you might have state obligations that you have to deal with as well, depending on where you're located. So let's close this out. Let's go back to the balance sheet here and see what happened. So if I go to the balance sheet, we can double click on the second one here and I'll say, OK, so here are the payments that we have made. So we've got those payments that have been made out. That looks right. So what we're left with is if I close this back out on the liability is the 2076, which should be the liability after the second payroll that we ran in February. So if I go back to the payroll summary and I run this from 0101. Oh, let's make it 020123 to 022823. And we add these up. This is going to be the 157823. That's what we withhold from the employees for the second month plus our portion of the 498.23. That's going to be the 2076 withholdings that we incurred in the second payroll. And that matches out what we still owe as of this point in time, which we're going to imagine that we would pay in March, which will be beyond our practice problem. The other side is up top here on the cash side of things. So if I go into cash, we could see the liability checks have been processed going into a liability check. Notice it looks quite similar to a normal check. It's a check type form. It even has the expenses tab down here, but usually this right side isn't payroll liabilities. It's usually items. So notice it's using the items tab because it's kind of using a widget field in a similar way as an item. So it's a payroll item tab here. So we've got to use the widget to get the special check. Now, if there's a problem with these checks, you basically have to kind of void them and re-enter them because you're using the special widget thing. And then if I go back up top and compare that to a normal check, then the second tab over here is usually an item tab instead of a payroll tab. Closing that back out, closing that back out. So that looks good. And of course, this information for our payroll summary, just note that at the end of the quarter, we're going to pay, we're going to have to do the 941s, usually quarterly, 940 yearly, W2s and W3s yearly. And then we've already been paying our payroll taxes as we process the payroll. So it's supposed to be that when we file the 941, which will be at the end of the first quarter, we can run a report 01, 01, 23 to 03, 31, 23, right, the first quarter, or you can hit the dropdown and say you want to see quarter one, right. And then, and then when we process the 941, it should just be an informational report. We should have, we should be able to say, hey, look, this is how much we owe. This is how much we paid. We don't owe you anything. We don't expect anything back. It's not, it's not, it's similar to when we filed the form 1040 for individual income taxes, which in a perfect world should be a form that we filed by April 15 of the following year of the tax year. And we shouldn't, if everything was perfect, we shouldn't get a refund or owe anything. It should just be an informational form. The federal income tax is way too complicated for that to actually happen. That's why we shoot for a refund. But the payroll taxes in essence are set up so that we can actually pay the proper amount as we go. And it should be just an informational 940 at the end of each quarter, usually. And then, and then we have the information returns the 940, I'm sorry, the 941s each quarter and the 940 at the end of the year and the W2s and W3 information returns. Okay, let's go ahead and take a look at our trial balance, trustee trial balance and changes from 010123 to 123123. And customize it, fonts and numbers changing to 16. Okay, yes, and okay, this is where we stand right now. If everything ties out great, if not, then try to change the date range and see if it's a date issue. We will check the transaction detail report shortly after we finish entering the transactions. I mean that might be next, we might do that actually next to look at the transaction detail report which hopefully helps us hone down on any discrepancies.