Interested in finding out the process to adjust payroll liabilities in QuickBooks desktop? Well, is yes, then this article is going to help you a lot. In this article, we are going to discuss the complete set of steps that can be performed to adjust payroll liabilities in QuickBooks desktop. Before moving ahead, you need to first understand what payroll liabilities are. Well, payroll liabilities in QuickBooks usually involve company contributions, employee additions, and deductions. It should be noted that, in situation when the payroll liabilities are incorrect, the user will have to make use of liability adjustment in order to fix them. Moreover, the user is only required to adjust the payroll liabilities only if he/she has the basic knowledge of accounting. Or else taking advice of an accountant is highly recommended to avoid any sort of further mess.
Just in case, the user is making use of assisted payroll or QuickBooks online payroll, then getting in touch with the professionals is suggested. It might be difficult for the user to adjust liabilities, as it involves technical process. If you are a tech professional or having basic knowledge, then continue to read the article or you can also get in touch with our industry-specialists at +1-844-521-0490 and let our experts handle the issue.
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Steps to adjust the payroll liabilities in QuickBooks desktop
In case the user is having basic, standard, or enhanced payroll, he/she can perform the below steps:
Before you follow the steps, the user should have a look at the following reasons to use a liability adjustment:
- The user is required to fix a health insurance company contribution set up with the wrong tax tracking type
- Another reason can be to change the amount for company contribution items like Health savings account or company match
- Or in order to correct YTD wages, deductions, or additions for an employee who will not be getting further paychecks
Step 1: Look for payroll discrepancies
- The user needs to first run a payroll checkup. This will help in looking for the problems that affect the liabilities. The tool will perform the following steps:
- The tool will verify the current setup by scanning the payroll data for missing info and discrepancies
- And then review employee records, payroll item setup, and wage and tax amounts
- After that identify the tax amount discrepancies on flat rate tax. The tool will further cater suggestions on the processes to fix problem
- Run a payroll summary report for the quarter you wish to adjust.
Step 2: The second step is to adjust payroll liabilities
In this process move to the employees menu and then the payroll taxes and liabilities and also choose Adjust payroll liabilities option – Screenshot.
- Use these tips to help completing the fields
- Making use of the same date as the last paycheck of the affected quarter is suggested. And also, the user should use today’s date if he/she is working on the current quarter
- Effective date is used to calculate the amounts on the 940 and 941 forms, along with payroll liability balance report.
Verify if the adjustment is for the company or an employee?
- If yes, then select employee adjustment, if the item being adjusted is a company paid item. This updates the YTD info reported on the employee W2 form.
- The user needs to select the company adjustment if he/she needs to remove the balance from the payroll liability balance report.
- After that select the employee.
- Now complete the taxes and liabilities fields
- Go for the item name that is to be adjusted
- Enter the amount and use a positive number to increase or negative to decrease the amount.
- Note that, the wage base is rarely required, even when the user needs to override a tax amount on the paycheck.
- Now, use income subject to tax when making a wage base adjustment.
- Use of the memo field to enter a note about the adjustment for further reference.
- In this step, choose accounts affected and hit ok tab
- Go for the do not affect accounts, so as to leave balances unchanged for the liability and expense accounts. The adjustment will change the year to date amounts.
- After that, choose the affect liability and expense accounts to enter an adjusting transaction in the liability and expense accounts
- Perform the same steps for other employees in case you need to and click on OK tab.
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Step 3: Ensure that the liabilities are updated
The user is recommended to run the payroll summary report again to ensure everything is fine.
Step 4: Carry out the steps to correct the payroll liability check
This step requires the user to carry out the steps to correct the payroll liability check.
- Head to the banking tab and select use register.
- Go for register used for payroll and hit ok tab
- Once done with that right click the liability check and choose edit liability check
- Head to the payroll liabilities and update them to match the changes
- Complete the steps by selecting save and close and hit yes tab.
See Also: How to Combine the QuickBooks Desktop Company files?
Final Words..!
Making adjustments in payroll liabilities isn’t as easy as it seems to be but can be performed using the set of steps mentioned in above. However, if you aren’t a professional and aren’t versed with the nitty-gritty of QuickBooks, then feel free to reach out to our team professionals at +1-844-521-0490 and ask them to perform the right of steps on your behalf. Our QuickBooks support team has the complete knowledge and experience required to perform any sort of activity related to QuickBooks. Thus, do not think much and discuss your issues with our team right away for quick assistance.
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