Federal withholding under liabilities.

[F12Mahon]

On the balance sheet is a line under liabilities named federal withholding.It increases each month by the amount of Social Security and Medicare. It never goes back to zero , just keeps increasing.

We have one employee, the janitor. In payroll the pay items use default GL accounts.

Do I have something set up wrong when I pay the taxes?
I Debit 2217-SS and 2219-Medicare.

If that is incorrect, what should it be?
How do I get the balances corrected?

[NeilZ]

On the balance sheet is a line under liabilities named federal withholding.It increases each month by the amount of Social Security and Medicare. It never goes back to zero , just keeps increasing.

We have one employee, the janitor. In payroll the pay items use default GL accounts.

Do I have something set up wrong when I pay the taxes?
I Debit 2217-SS and 2219-Medicare.

If that is incorrect, what should it be?
How do I get the balances corrected?

Federal Withholding is usually Income Tax, are the withheld Social Security and Medicare taxes being credited to 2217-000 and 2219-000 when you write the checks? FWIW ... usually the default GL account for ALL Federal taxes is the 2220-000 when the program is setup. There really is no need to have separate SS and Medicare liability accounts as the system maintains tax breakdown in its database, and not by how much is in the liability accounts.

I would bet that you have negative numbers in those two accounts, and to fix that you'll need to create a transaction in Fund Accounting to credit 2220-000 and debit 2217-000 and 2219-000 for the negative amounts in each.

Then in future, just use the 2220-000 for ALL federal taxes (FICA, SS, Medicare) and debit it when you pay.

[F12Mahon]

Thanks for the reply. Still contemplating how to proceed. You are correct those two accounts are negative.

For reference for posts to follow. Still thinking and more to share when it isn't so late.

From Chart of Accounts
2205 Taxes Payable Group
2215 Federal Withholding
2217 SS
2219 Medicare
2220 State Taxes

[NeilZ]

Thanks for the reply. Still contemplating how to proceed. You are correct those two accounts are negative.

For reference for posts to follow. Still thinking and more to share when it isn't so late.

From Chart of Accounts
2205 Taxes Payable Group
2215 Federal Withholding
2217 SS
2219 Medicare
2220 State Taxes

FWIW ... I'd close the 2217 & 2219 accounts, no need for separation. Its all federal withholding.

[F12Mahon]

Woohoo!
Thank you for your help.

Doing what you suggested doubled the negative amounts so I had to do the opposite of what you said. The numbers then matched the withholding for January.

Thankfully we haven't had our board meeting so I could redo January's reports.

Thanks again!

[NeilZ]

Woohoo!
Thank you for your help.

Doing what you suggested doubled the negative amounts so I had to do the opposite of what you said. The numbers then matched the withholding for January.

Thankfully we haven't had our board meeting so I could redo January's reports.

Thanks again!

Sorry about that ... but you got the basic idea to move funds from where they were held to zero out those two accounts.

And I hope you took the advice I always tell everybody, before you try out any suggestion, do a Powerchurch backup of the Accounting files you can can restore back in case the results aren't what is expected

[F12Mahon]

Thank you Neil,

I learned long ago to back up before trying to correct something.
Many times I wish we could have an unmolested chart of accounts to
look at default account lines. The best way to learn PC plus is to use it and
make mistakes.

Have a good weekend!