QuickBooks Payroll Tax Adjustment

Total Time: 10 minutes

1. Customize Report

   💠 Open Payroll Detail Review report.
   💠 Now, you will need to customize the report to show only the affected tax items, date, and employees.
   💠 Click on Customize Report > Display tab.
   💠 Drop down the list and choose the date range or fill in the Form and dates.
   💠 Click on the Filters tab and select the particular item(s) from the list that you need to display.
   💠 For specific employees, select the employee name from the list then check-mark on it.
   💠 To display exact list of tax items or payroll items, select the payroll item(s) from the filter list.

2. Verify Tax Amount

   💠 Verify that the tax amounts are correctly calculated based on tax rate and wage limit.
   💠 Check whether the employee had achieved the wage base limit. When this happens, QuickBooks stops to calculate the tax amounts.
   💠 In order to confirm reported taxes are accurate based on wage base, you can multiply the amount of wage base with the assigned rate.
   💠 Go through the report and decide whether you want to increase or decrease the income subject to tax, tax amount, and wage base, and by what amount.
   💠 Apply the positive value if you want to add income subject to tax, tax amount and wage base.
   💠 Apply the negative value if you want to reduce income subject to tax, tax amount and wage base.

3. Adjusting Payroll Tax

   💠 Click on Employees then select Payroll Taxes and Liabilities
   💠 Open to Adjust Payroll Liabilities.
   💠 On Liability Adjustment Window, choose the accurate Effective Date. (It has to be the last day of affected quarter or current date.
   💠 Click on Employee Adjustment.
   💠 Drop down and choose the affected employee from the list.
   💠 From Taxes and Liabilities, click on the Item Name column and choose the tax item or payroll that needs adjustment.
   💠 Enter the correct amount in the corresponding column (positive to increase or negative to decrease).
   💠 Note the reason for adjustment in the Memo column.
   💠 Click on Accounts Affected.
   💠 Check mark on “Do not affect…” or “Affect liability…”
   💠 Click on Next Adjustment tab if have to make more adjustment. If finished, click on OK to save the changes.
   💠 Refresh Payroll Detail Review to confirm accuracy of the added adjustments.