The New QuickBooks Online Payroll - 'Tax Stuff'

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Over the past several weeks, with a few interruptions to cover other major topics, we have been looking at 'the new QuickBooks Online Payroll' subscriptions that went into effect for everyone the first of November.  We are now to the point that we can talk about the really fun stuff... 'payroll taxes, etc.'

Fortunately, 'payroll frustrations' can be reduced using the new QuickBooks Online payroll line-up, which includes three full-services offerings. This is because QuickBooks Online Payroll will calculate, e-pay, and e-file the payroll taxes on your client’s behalf.

All businesses that pay their employees (aka: pay payroll) are required by law to file and submit payroll taxes and forms. How they process, these forms can be made extremely easy if you are using one of the QuickBooks Online Payroll Core, Premium, or Elite subscriptions. The various forms that need to be processed can differ drastically from weekly, monthly, quarterly, or annually. Managing multiple clients’ payroll tasks creates opportunities for mistakes, like late submissions resulting in penalties and interest payments due.

During the QuickBooks Online Payroll setup, you are asked vital questions such as the filing liabilities timeline and local payroll liability rates. These details help QuickBooks determine the amount to e-pay and the e-filing timeline and method required.

Automated Taxes and Forms Option

Automated taxes and forms is a QuickBooks Online Payroll feature which allows you or your client to automate e-paying and e-filing. Automated taxes and forms is turned on by a default setting inside of QuickBooks Online Payroll. Core, Premium, and Elite subscriptions offer automated taxes and form filing. There are differences in the submission options if you have specialized tax liabilities such as local county taxes. In this case, the Core payroll would not file these local taxes, and the business would be responsible for submitting.   

Turning Off Automated Taxes and Forms

Automated taxes and forms can be turned off, resulting in a manual option for submitting and payroll payments and forms.

Unless you opt to turn off payroll, automated taxes and forms will be processed by QuickBooks Online Payroll. If you wish to pay and file payroll tax liabilities manually, you can change the default setting. QuickBooks recognizes sometimes there are genuine reasons you may need to have complete control over submittals. Even if you turn off automated taxes and form, you can e-pay and e-file payroll liabilities in QuickBooks Online payroll, but you will need to push the submit button. Otherwise, you can use QuickBooks’ calculation to process the payments and forms directly on the liability website.

How to Access the Automated taxes and forms settings:

  1. QBO Gear Icon
  2. Payroll Settings
  3. Automated taxes and forms
  4. Choose to On or Off
  5. Save

Paying and Filing Payroll Taxes

Using the default e-pay and e-file setting means each payroll liability payment is processed through QuickBooks automatically on time and accurately using the data entered already for each employee payroll run.

If you opt to turn off Automated taxes and forms, you or your client are responsible for payments and form submissions.

Adjusting Tax Liabilities

Currently, there is no way to make an adjustment to payroll tax liabilities. Suppose you do need to make a payroll adjustment; there a few options. You can have QuickBooks Online Payroll adjust for you by calling your payroll support agent. Or if you have turned off automated taxes and forms and incurred a penalty or interest fee, you can record those separately in QuickBooks using an expense transaction.

Viewing Payments and Forms 

No matter if automated taxes and forms are turned off or on, you have the same access and visibility into forms if you have submitted through the QuickBooks Online payroll subscription. If you have opted to file forms outside of QuickBooks Online Payroll, you will need to go directly to those platforms to view submissions.

To access, view and print both archived payments and forms submission in QuickBooks Online payroll:

  1. Use the QBO Navigation Bar
  2. Select Taxes, then Payroll Tax
  3. Choose either Tax Payments or Forms tab
  4. Select the Quarter section
  5. Select View and Print Archived documents

In our next feature about 'the New' QuickBooks Online Payroll we will wrap-up this mini-series with a look at the Payroll Year-end features in these new subscriptions.