Cash bonus payments included for tax

I'd be glad to guide you in handling your taxable cash payments in QuickBooks Desktop Payroll, Deadwood.

Indeed, you are correct. To manage cash bonuses effectively, you'll need to set up two separate payroll item lists in QuickBooks: one for taxable bonus (Cash Bonus) and another for non-taxable bonus (Bonus Reverse).

Here's how:

1. Go to Lists, then select Payroll Item List.
   
   
2. Click Payroll Item, then New.
   
   
3. Choose Custom Setup and hit Next.
   
   
4. Select Wage, then Next.
5. Choose Bonus, then Next.
   
   
6. Enter the name of this item "Cash Bonus", then click Next.
   
   
7. Select the income account you want the item to track to, then select Finish.

Next, apply the same process to the non-taxable item (Bonus Reverse).

When processing your employee's payroll, include the taxable item (Cash Bonus), so QuickBooks will automatically calculate the taxes for the bonus payment. Then, enter the non-taxable amount for deductions to offset the cash bonus amount

For detailed information and steps, you can utilize this article for reference: Pay employee bonuses.

Moreover, I've added this article as your reference if you want to print paychecks and pay stubs: Print or reprint paychecks and pay stubs.

Keep us posted if you have further questions about handling cash payments in QuickBooks Desktop. We'll be here to lend a hand at any time.

You said "For deductions, enter the non-taxable amount as a negative figure to offset the cash bonus amount."

If the item "Bonus Reverse" is created as a Deduction type, I don't think you enter it as a negative amount ...?? A deduction is automatically subtracted from the amount to pay, just like other deduction items (insurance cost, garnishments, 401K contributions, etc.)  

Did I miss something, or did you not really mean to "enter" is as a negative amount?

You haven’t overlooked anything, and there’s no need to input a negative figure since deductions are deducted from pay automatically, Deadwood. Let me clarify the process for recording bonuses to ensure a correct calculation of the tax amount.

Itemizing deductions such as insurance expenses, garnishments, and 401K contributions within the Payroll Info will automatically lower your income. In this scenario, the Cash Bonus and Cash Reverse will be deducted from an employee’s earnings without needing to enter a negative amount.

Alternatively, creating a bonus item from the Payroll Item List enables you to add it to the Earnings section. Therefore, we can establish a custom entry for the Cash Bonus and a deduction-type entry for the Cash Reverse. I'll show you how:

1. Go to Lists, then select Payroll Item List.
2. Click Payroll Item then New.
3. Choose Custom Setup, then Next.
4. Select Wage, then Next.
5. Choose Bonus, then Next.
6. Input Cash Bonus as the name of this item, then Next.
7. Select the expense account you want this item to be associated with, then Finish.

Next, follow these instructions for the Reverse Bonus:  

1. Go to Employees, then Employee Center.
2. Select your employee. 
3. Select Payroll Info, then add the bonus item in the Additions, Deductions, and Company Contributions section.
4. Select OK.

I'm adding some screenshots below for reference:

Additionally, you can pay the bonuses on separate paychecks or include them with regular ones. To proceed, scan Step 2: Pay out the bonuses in this article for detailed instructions: Pay employee bonuses.

Moreover, you can print your paychecks or pay stubs in QuickBooks Desktop Payroll to provide them directly to your employees.

I’m just a message away if you have any additional questions or concerns regarding the documentation of bonuses for tax purposes in QuickBooks. Stay safe.