Tax payments

[Kathie]

In preparing to pay my quarterly taxes, I ran an account activity report for all payroll deductions. It appears that last year I didn't debit the liability accts properly, since Fed. Withholding shows a negative balance and the others show a positive balance equal to the entire year's withholdings. When I wrote the checks, I only debited Fed. Withholding and didn't split out the amounts.

How do I correct this, especially since those months are closed? Also, am I correct that I should have debited each liablilty (Social Security, Medicare, etc.) separately, with one credit to the checking account?

[Zorak]

Also, am I correct that I should have debited each liablilty (Social Security, Medicare, etc.) separately, with one credit to the checking account?

That is correct, however a negative balance on the liability would point to the account having been debited properly, when paying the taxes, but somehow never credited in, when payroll was being processed.

If you still have months open from the prior year, versions 9 & 10 will allow you to go back that far and post corrections, so that your beginning balance for 2007 is correct. If the months are closed, however, an adjustment would need to be posted to your current, or earliest open month to bring the liability account up to the correct balance.

Since this is still in the negative here in 2007, you will also need to check the Maintain Item Descriptions screen under the Payroll menu to make sure that your Federal Withholding items are affecting the correct accounts. They should be debiting the bank account and crediting the liability.

[Kathie]

I really appreciate your help and prompt responses. This is a "learn as I go" position, but everyday I become more knowledgeable and efficient, thanks to this forum.