When payroll checks are entered, FICA, Federal and State Taxes show up in the income and expense report as a Salary Expense.
When I make a check out for the federal and state taxes, does the software know that these expenses are the same, therefore, they are not duplicated expenses?
I cannot get our Income and Expense Statement to balance each quarter, and feel that the employee and employer taxes may have something to do with it.
While 4 of our 5 funds are easily balanced, the one which includes our payroll taxes is consistently off (sometimes in excess and sometimes short). This report would not balance when I took over this accounting job 2 years ago. Since then, I have managed to reconcile the accounts with the bank statement, however, I cannot get the income and expense statement to balance. I have run out of places to look for an answer.
Any help would be appreciated!
PAYROLL TAXES
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Zorak
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It sounds like the problem is coming from the Payroll > Maintain Item Descriptions screen. This is where the account numbers are assigned to each individual payroll item.
You should see the following:
Income items - credit Bank Account / debit Salary Expense
Deduction items - credit Tax Liability / debit Bank Account
Employer Liability items - credit Tax Liability / debit Employer Tax Expense
It sounds like the Deductions and possibly the Employer Liability items are set up with the wrong accounts assigned.
You should see the following:
Income items - credit Bank Account / debit Salary Expense
Deduction items - credit Tax Liability / debit Bank Account
Employer Liability items - credit Tax Liability / debit Employer Tax Expense
It sounds like the Deductions and possibly the Employer Liability items are set up with the wrong accounts assigned.
Thank you for your quick reply!
I'm familiar with the "Maintain Item Descriptions" screen. Everythink looks ok exept one thing: The employer tax has NOT been included in the Payroll check. An outside accountant computes our employer taxes, sends me a report, and then I cut the federal check as an accounts payable vendor check: Debit Payroll Taxes and Credit the bank account.
I can see where putting the Employer payroll taxes would be a better choice, but it seems that the way I've been entering them wouldn't effect the balance amount since I never entered the taxes in the payroll check. Or could it alter the balance?
Our income & expense report is usually off around $600 to $1100 dollars in either direction (excess/short). What do you think?
I'm familiar with the "Maintain Item Descriptions" screen. Everythink looks ok exept one thing: The employer tax has NOT been included in the Payroll check. An outside accountant computes our employer taxes, sends me a report, and then I cut the federal check as an accounts payable vendor check: Debit Payroll Taxes and Credit the bank account.
I can see where putting the Employer payroll taxes would be a better choice, but it seems that the way I've been entering them wouldn't effect the balance amount since I never entered the taxes in the payroll check. Or could it alter the balance?
Our income & expense report is usually off around $600 to $1100 dollars in either direction (excess/short). What do you think?