Liability Acct MCR & SS totals incorrect

[Blessed]

Hi, I'm using Powerchurch 11.5 on a PC. Under liabilities I have an ever increasing total for MCR & SS. I am wondering if their is something that was set up incorrectly or incompletely that would connect the account with the monthly payments being sent out? I am not an accountant, but I am trying to keep accurate records & reports. The Balance Sheet is incorrect. I would appreciate any help. Thanks

[NeilZ]

Hi, I'm using Powerchurch 11.5 on a PC. Under liabilities I have an ever increasing total for MCR & SS. I am wondering if their is something that was set up incorrectly or incompletely that would connect the account with the monthly payments being sent out? I am not an accountant, but I am trying to keep accurate records & reports. The Balance Sheet is incorrect. I would appreciate any help. Thanks

MCR ?? Medicare??

Are you using the Create Accounts Payable Entries in Payroll to create the Invoices/Manual Checks for the FITW, Medicare & Social Security payments?

If not, you should be using the Medicare & Social Security liability account in a manually entered Accounts Payable Invoice/Manual Check when you pay your Monthly Federal Tax payment.

Check to see what VENDOR is setup for the Medicare & Social Security Item Description. It should be the same as the FITW vendor. I have the IRS listed for all three.

[Blessed]

Hi Neil,
Yes MCR => Medicare. I'm not using the create accounts payable entries to create invoices for the taxes. What I have been doing is entering the transaction in Fund Accounting for Fed and State. The taxes are paid to IRS by EFTPS and the State by bank draft. When I create the entry I think the total is being deducted from the bank account and the liability accounts are used to separate the amounts for each tax withheld. I don't see any vendor under item description except the general bank account and nothing that list the IRS as a vendor. Maybe this was never set up by previous user. I'm reading the book and honestly I don't know how to do this. Would appreciate any help

[NeilZ]

Hi Neil,
Yes MCR => Medicare. I'm not using the create accounts payable entries to create invoices for the taxes. What I have been doing is entering the transaction in Fund Accounting for Fed and State. The taxes are paid to IRS by EFTPS and the State by bank draft. When I create the entry I think the total is being deducted from the bank account and the liability accounts are used to separate the amounts for each tax withheld. I don't see any vendor under item description except the general bank account and nothing that list the IRS as a vendor. Maybe this was never set up by previous user. I'm reading the book and honestly I don't know how to do this. Would appreciate any help

You need to setup the IRS as well as any state and local tax authorities as vendors in the Accounts Payable module. These vendors should be included on the Item Description for each deduction Pay Item in payroll. Then you could use the Create Accounts Payable Entries which would then create the proper manual check entries in AP.

When I pay the IRS this is what the system creates for the manual check, which is deducted through EFT in EFTPS:

01-1110-000 Checking CR 713.42
01-2217-000 S.S. DB 372.08
01-2219-000 Medicare DB 87.02
01-2215-000 Federal Withholding DB 254.32

FWIW .. these are the default liability accounts that the Payroll Setup assistant creates. As far as assisting with the proper use of payroll, that is beyond what is feasible using the forum.

May I suggest that you talk to your governing board about investing in the Payroll Video Training. Its money well spent. Here's a preview;

https://www.powerchurch.com/training/vi ... .php?id=12