User Support Forum

When setting up payroll tax information, do you debit or credit the bank?

Ex: Do I
DB: 01-1110-000 Bank
CR: 01-2215-000 Federal Witholding

OR, DO I
DB: 01-2215-000 Federal Witholding
CR: 01-1110-000 Bank

Thanks!

You can read this thread to see all the transactions.

http://powerchurch.com/forum/viewtopic.php?f=3&t=4616

Basically, you take *all* the money out of checking for the person's income.

Then, you put back the tax deduction into checking, if and only if, you have to pay the tax to another entity. You do this by debiting the checking account and crediting the liability account.

When you pay the tax to another entity, you again credit the checking account and debit the liability account.