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Federal Taxes Not Deducted Correctly

Previous payroll (last one of the year) did not deduct all taxes. Checks were distributed. Should I just manually add to the deductions on the next checks (first one of new year)?

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Best answer 01-23-2019

Accepted Solutions
QuickBooks Team

Re: Federal Taxes Not Deducted Correctly

Pleased to have you here, @Jessup.

 

Welcome to the Community! I’d be delighted to share some information why the federal taxes are deducted incorrectly on the last payroll you run for last year.

 

Here are the possible reasons QuickBooks aren’t calculating federal taxes properly:

  • Total annual salary exceeds the salary limit.
  • The gross wages of the employees last payroll are too low.
  • Ensure to run the latest payroll update to keep your taxes updated.

When the federal withholding is not deducting correctly, you’ll have to revisit your employees’ profiles if they are set up correctly. QuickBooks calculates the federal withholding based on these factors:

  • Taxable wages
  • Number of allowances/dependents
  • Pay frequency
  • Filing status

To review your employees’ payroll information, here’s how:

  1. Go to Employees menu.
  2. Choose Employee Center.
  3. Double-click the employee’s name, one at a time.
  4. Select Payroll Info on the left.
  5. Please make sure the Pay Frequency is correct.
  6. Click the Taxes button.
  7. In the Federal tab, review the Filing Status and Allowances fields. Make the necessary corrections.
  8. Hit OK.
  9. Click OK again.

On the other hand, if you add the deduction to your employee’s first payroll of the year, the liabilities will be added to the current year instead of last year. What you can do is to create an adjustment check dated the same with the last payroll. By doing so, you’ll not have problems with your 2018 tax forms like 941 and W2.

 

If the employee is overpaid on the last payroll, you can create a deduction item with a tax tracking of “None” and use it on their first payroll of the year.

 

If you need further assistance with the steps above, I’d recommend reaching out to our Payroll Support Team. A payroll specialist would be able to further help you via secured remote access session.

 

Here’s how to contact us:

  1. Visit: https://help.quickbooks.intuit.com/en_US/contact. 
  2. Choose your QuickBooks Product
  3. Select Payroll
  4. Choose your type of Payroll Subscription
  5. Hit Payroll
  6. Click on the View Contact Info button to see the support number. 

Feel free to click the Reply button if you have other questions about calculating federal withholding in your employee’s paycheck. I’m always here to lend a hand.

View solution in original post

1 Comment
QuickBooks Team

Re: Federal Taxes Not Deducted Correctly

Pleased to have you here, @Jessup.

 

Welcome to the Community! I’d be delighted to share some information why the federal taxes are deducted incorrectly on the last payroll you run for last year.

 

Here are the possible reasons QuickBooks aren’t calculating federal taxes properly:

  • Total annual salary exceeds the salary limit.
  • The gross wages of the employees last payroll are too low.
  • Ensure to run the latest payroll update to keep your taxes updated.

When the federal withholding is not deducting correctly, you’ll have to revisit your employees’ profiles if they are set up correctly. QuickBooks calculates the federal withholding based on these factors:

  • Taxable wages
  • Number of allowances/dependents
  • Pay frequency
  • Filing status

To review your employees’ payroll information, here’s how:

  1. Go to Employees menu.
  2. Choose Employee Center.
  3. Double-click the employee’s name, one at a time.
  4. Select Payroll Info on the left.
  5. Please make sure the Pay Frequency is correct.
  6. Click the Taxes button.
  7. In the Federal tab, review the Filing Status and Allowances fields. Make the necessary corrections.
  8. Hit OK.
  9. Click OK again.

On the other hand, if you add the deduction to your employee’s first payroll of the year, the liabilities will be added to the current year instead of last year. What you can do is to create an adjustment check dated the same with the last payroll. By doing so, you’ll not have problems with your 2018 tax forms like 941 and W2.

 

If the employee is overpaid on the last payroll, you can create a deduction item with a tax tracking of “None” and use it on their first payroll of the year.

 

If you need further assistance with the steps above, I’d recommend reaching out to our Payroll Support Team. A payroll specialist would be able to further help you via secured remote access session.

 

Here’s how to contact us:

  1. Visit: https://help.quickbooks.intuit.com/en_US/contact. 
  2. Choose your QuickBooks Product
  3. Select Payroll
  4. Choose your type of Payroll Subscription
  5. Hit Payroll
  6. Click on the View Contact Info button to see the support number. 

Feel free to click the Reply button if you have other questions about calculating federal withholding in your employee’s paycheck. I’m always here to lend a hand.

View solution in original post

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