Today there are many payroll offerings available and computer applications promise our clients easy access. QuickBooks is no exception. After purchasing QuickBooks payroll our clients setup their employees and happily begin paying them for their time contribution to their company. Quarterly compliance comes along and they press the buttons, print and sign the forms and mail them off to the taxing agencies.
Then along comes those pesky letters from those same taxing agencies stating something went wrong with the filings. The client calls on us, their trusted QuickBooks expert, to solve the problem. Many of those problems reveal issues with the payroll liability payments. The discrepancy could be a payment recorded in the books the IRS does not show received, payments posted to the wrong IRS account or possibly an over payment.
There is not, within QuickBooks, a ready-made report that provides us with a detailed list of those payments. This makes comparing the payments the taxing agency reports received to those payments processed in QuickBooks more difficult and cumbersome.
Years ago while working on resolving a client’s 3 year problem with their payroll tax returns and liability payments I developed a report that provides for just this comparison. Using the find transactions dialogue in QuickBooks and several filters and column selections, I captured the payments processed in a liability period versus the transaction date.
Start by opening the Find transaction window. Using the advanced tab select the following filters:
Transaction type: Payroll Liability Check
Names: Multiple Names – select the names of the taxing agencies. If unsure, you can find them in the items of the payroll items list. In California I usually select EFTPS, EFPTS (FUTA) and EDD.
Paid Through: Select Last Calendar Quarter
Click Find then Click Report
Let’s customize this report to obtain totals by agency and see the tax items being paid. Click Customize report. On the display tab checkmark the columns labeled: Paid through and payroll item. Deselect columns labeled: Liability Check, Memo, Account, Clr, Split and Balance. On this same tab, in the Total by drop down select Payee.
Now move to the Header/Footer tab and change the report title to “Payroll Liability Payments”. Click Ok. You now have a report that displays each liability payment for the previous calendar quarter totaled by each taxing agency.
The key to this report is the Paid through date. The transaction date, which is seen on the screen within the window of the report, must always be set to all. Change the paid through filter date to the liability date range required for your troubleshooting task.
If you were to view many of our client’s memorized report lists you would find this report saved in the Employees group, especially for those clients that request we process their compliance reporting. We use this report to prove the tax payments against the reports prior to filing. Do keep in mind that this report captures only those reports processed via the correct method for processing payroll taxes in QuickBooks. You will need to go on a hunt to catch those that didn’t follow this path.
So now, when your client sends you one of those pesky letters, you have another tool in your arsenal to find a resolution.
About the Author:
Bonnie Crabtree is the owner of BoundlessBiz in Modesto, CA. She started her company in the fall of 2014 after 10 years as the senior bookkeeper in a CPA firm. Bonnie has over 30 years of experience in the accounting industry and has been working with QuickBooks for the last 10 of those years. She is about to become an empty nester as her youngest son starts college this fall. She desires to fill her time by bringing hope to small businesses in her area.