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Hello,
I am on cash-basis but payroll taxes have not been paid for the prior quarter. Can I have a payroll liability on my balance sheet? I'm forced to accrue the expenses for the prior year. Is payroll liability the exception to cash basis?
Thank you
It’s nice to see you again in the Community, @n1njah.
Your payroll liabilities will show on the balance sheet. It doesn’t matter if you’re using accrual or cash since this is money owed.
The amount showing on the liability accounts are based on the paycheck date. Use that to record the transaction.
If you proceed with reporting the unpaid taxes, create an adjustment and use the same accounts associated with the payroll items. I recommend consulting an accountant to ensure everything is accurate.
Here’s how:
Take a look at this article for the details: Adjust payroll liabilities in QuickBooks Desktop.
I'm here to provide further assistance if you need it. Thanks for visiting the Community and take care!
Hi Khimg, thank you for the response. I guess what I meant was, for tax purposes would this create any issue? As in would I still be able to accrue payroll taxes and report that as an expense for tax purposes even though I haven’t physically paid it yet?
Thanks for adding more information about your concern, n1njah.
The taxes for the liabilities will continue to add up whenever you run payroll. If you’ll pay the 12/31 transactions, make sure to record them in the correct period. This is to ensure your financial records are correct.
For an overview of how your entries are displayed in QuickBooks for each accounting method, see the Differentiate Cash and Accrual basis article.
Reach out to me if you have any other concerns or questions about the product. Please know I’m here to answer them for you. Enjoy the rest of the day.
Apparently reading words is no longer involved in answering questions lol. I love that you rephrased it and the answer was still insanely vague. It seems to be a very common thing among non English fist language persons who love to answer questions with other questions rather than just answering the question. its really not that hard.
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