Payroll Taxes Payable

[flcalgona]

I have a transaction I need to create and I can't seem to figure out how to proceed. I need to credit $7.02 to our Payroll Taxes Payable due to a change made earlier in the year between FSA and HSA withholdings. When payroll taxes were paid an additional $7.02 payment was made. I do not know how to create a transaction so that my Payroll Taxes Payable will zero out. Any assistance would be appreciated.

[NeilZ]

I have a transaction I need to create and I can't seem to figure out how to proceed. I need to credit $7.02 to our Payroll Taxes Payable due to a change made earlier in the year between FSA and HSA withholdings. When payroll taxes were paid an additional $7.02 payment was made. I do not know how to create a transaction so that my Payroll Taxes Payable will zero out. Any assistance would be appreciated.

Quick question, do you need to adjust the Payroll so that the proper amount shows as the end of year W2 ??

If so, you'd need to reverse that Payroll transaction for the employee (under the Maintain List of Employees), and reissue (not print) that same check, then modify that reissued transaction in the Modify Unposted Payroll function of the Payroll module.

When you post these two transactions, the reversal (void) and the reissue, the system will create the proper transactions to adjust the system.

Hope this helps.

[flcalgona]

Thanks for the reply. We use a local company to complete our payroll. So the payroll reports at year end should be correct. I just don't know how to credit our payroll taxes payable account the $7.02. We have what we call an Ins & Outs that is an Asset. Could i use that somehow?

[NeilZ]

Thanks for the reply. We use a local company to complete our payroll. So the payroll reports at year end should be correct. I just don't know how to credit our payroll taxes payable account the $7.02. We have what we call an Ins & Outs that is an Asset. Could i use that somehow?

Er ... not really.

OK ... did you get money back if so, you need to DEBIT the checking account where the funds came from, and DEBIT the Payroll Taxes expense.

That said, does the payroll company also file the quarterly 941 report? Does it also pay the withholding taxes for the church?

Not knowing how you track those types of withholding taxes in Powerchurch makes giving you advice a bit harder.

[flcalgona]

The payroll company files the quarterly 941 for us. They also file the report monthly to the IRS and the funds automatically come out of our checking account. When payroll is processed, I receive a series of reports from them stating all the withholding amounts for each employee and I post to PowerChurch from that report. In my mind an additional $7.02 should have come out the next pay period. The accountant states that she did indeed make the correction and that I need to make the adjustment on my end. And, I just don't know how to do it!

[NeilZ]

The payroll company files the quarterly 941 for us. They also file the report monthly to the IRS and the funds automatically come out of our checking account. When payroll is processed, I receive a series of reports from them stating all the withholding amounts for each employee and I post to PowerChurch from that report. In my mind an additional $7.02 should have come out the next pay period. The accountant states that she did indeed make the correction and that I need to make the adjustment on my end. And, I just don't know how to do it!

OK ... so you paid too much and got money back, or too little and will be paying more??

If the first, you have to credit the expense account that pays the taxes, and debit the checking account.
If the second, you debit the expense, and credit the checking.

The transaction will look much like the one you create to update Powerchurch, with the amount in the column needed.

[flcalgona]

Thanks for your assistance. In March 2026 we paid the $7.02 MORE to the IRS. I don't think I should debit the expense, and credit the checking, because the money has been paid out. I do not want another $7.02 to from the bank or I will not be able to reconcile. I need a credit of $7.02 to my payroll taxes payable so when I reconcile that account (current balance subtract what is due to IRS and subtract what is due to the State) I will be zero. I could be totally mis-understanding this whole transaction. I am making it too complicated!

[flcalgona]

Thanks for your assistance. In March 2026 we paid the $7.02 MORE to the IRS. I don't think I should debit the expense, and credit the checking, because the money has been paid out. I do not want another $7.02 to from the bank or I will not be able to reconcile. I need a credit of $7.02 to my payroll taxes payable so when I reconcile that account (current balance subtract what is due to IRS and subtract what is due to the State) I will be zero. I could be totally mis-understanding this whole transaction. I am making it too complicated!

[NeilZ]

Thanks for your assistance. In March 2026 we paid the $7.02 MORE to the IRS. I don't think I should debit the expense, and credit the checking, because the money has been paid out. I do not want another $7.02 to from the bank or I will not be able to reconcile. I need a credit of $7.02 to my payroll taxes payable so when I reconcile that account (current balance subtract what is due to IRS and subtract what is due to the State) I will be zero. I could be totally mis-understanding this whole transaction. I am making it too complicated!

OK .. now I see what is happening. So ... you paid too much, and the payroll company will be adjusting the next withholding to the IRS to account for that, or have they done so already?

Example: The end of May withholding needs to be paid, the normal tax would be 307.02. However, since you have a credit at the IRS of 7.02, they only send 300.00? They tell you that you need to do the taxes paid transaction for only $300. This would then account for the overage.

Again, if this is not the case, please be more specific on how you and the payroll company communicate so you can enter the proper transactions in Powerchurch.