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Level 1

Federal Taxes Not Deducted Correctly

On the most recent payroll for this week, federal taxes do not seem to have calculated correctly.  Higher paid employees have a tiny bit deducted, and lower paid employees have nothing deducted.  I had all payroll updates installed, what could have caused this?

Solved
Best answer January 31, 2018

Best Answers
Highlighted
Moderator

Federal Taxes Not Deducted Correctly

Hi there, Sunburst,

 

I can help check why the federal taxes are deducted incorrectly. I want to ensure correct taxes are calculated so accurate amounts are paid and filed to the IRS.

 

It's great that you've already installed the latest payroll updates. That knocks one step off of what we need to try next.

 

If it's the federal withholding that's not deducting correctly, you'll need to confirm the employees' profiles are set up correctly. QuickBooks calculates the federal withholding based on these factors:

 

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

 

Please follow the steps below to check the employees' profiles:

 

1.    Click the Employees menu.
2.    Select Employee Center.
3.    Double-click the employee’s name, one at a time.
4.    Click 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.    Click OK.
9.    Click OK again.

 

You can also try manually calculating one of the employee's paychecks to see if it matches QuickBooks. To help figure out the exact withholding amount, please go through the IRS 2018 Publication 15.

 

You can use the Percentage Method (page 44-45). It's the same method used by QuickBooks to calculate federal withholding.

 

If you need further assistance calculating federal withholding, you can contact me directly. I'll be here to help in any way I can.

View solution in original post

14 Comments
Highlighted
Moderator

Federal Taxes Not Deducted Correctly

Hi there, Sunburst,

 

I can help check why the federal taxes are deducted incorrectly. I want to ensure correct taxes are calculated so accurate amounts are paid and filed to the IRS.

 

It's great that you've already installed the latest payroll updates. That knocks one step off of what we need to try next.

 

If it's the federal withholding that's not deducting correctly, you'll need to confirm the employees' profiles are set up correctly. QuickBooks calculates the federal withholding based on these factors:

 

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

 

Please follow the steps below to check the employees' profiles:

 

1.    Click the Employees menu.
2.    Select Employee Center.
3.    Double-click the employee’s name, one at a time.
4.    Click 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.    Click OK.
9.    Click OK again.

 

You can also try manually calculating one of the employee's paychecks to see if it matches QuickBooks. To help figure out the exact withholding amount, please go through the IRS 2018 Publication 15.

 

You can use the Percentage Method (page 44-45). It's the same method used by QuickBooks to calculate federal withholding.

 

If you need further assistance calculating federal withholding, you can contact me directly. I'll be here to help in any way I can.

View solution in original post

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

What can I do if taxes are not deducted at all?

Highlighted
Anonymous
Not applicable

Federal Taxes Not Deducted Correctly

Hello there, jgmigracion,

 

I can share a bit more about correcting your payroll taxes.

 

May I know if you're using the QuickBooks Desktop Payroll Service? If so, we'll need to identify when did the taxes stop calculating for us to make necessary corrections.

 

If the unexpected behavior only affects the most recent payroll checks, QuickBooks Desktop has an auto-calculation feature that carries over the underpaid taxes for the next payroll run. However, this feature only applies to rate based taxes like Social Security, Medicare or unemployment taxes and does not include withholding taxes.

 

In this case, you'll need to calculate the Federal Withholding manually. You can follow what my colleague MichelleT has advised in her answer above to calculate withholding taxes.

 

However, if the issue happened to several pay periods, we'll need to do a payroll liability adjustment to fix your taxes. Here's an article to help you with the process: Adjust Payroll Liabilities

 

Please keep me posted on how this goes, jgmigracion. I'm here to get things sorted out for you.

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

I am having the same issue, but quickbooks help had to escalate the ticket and no response yet. Did you get this fixed (how if so)?

Highlighted
Moderator

Federal Taxes Not Deducted Correctly

Hey there, @dananwalters.

 

Thanks for joining us here in the Community. I can help get this taken care of, but I have some questions about your concern first.

 

So that I'm able to provide you with the most accurate information, what QuickBooks version and Payroll subscription are you currently using right now? You can leave a comment below to add more details. This can be done by clicking the Reply (green) button.

 

Looking forward to your response and providing further help. Have a good one.

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

I'm having the same issue.  It seems as if the federal income tax is double what it should be.  
Any help?

Highlighted
Anonymous
Not applicable

Federal Taxes Not Deducted Correctly

Thanks for joining this thread, @nreber.

 

I'm here to help share additional information about incorrect federal income tax calculation in QuickBooks.

 

Have you tried checking your Payroll reports to compare your previous federal income tax?

 

There are some possible reasons why your payroll taxes are calculating incorrectly. To ensure accurate calculation, your employees and payroll items should be set up correctly. It's also recommended to run a payroll report to verify if there are any discrepancies in your payroll data.

 

If you've already verified the taxes setup on your employee's profile, please refer to this article for other steps in fixing wrong tax calculation: QuickBooks Desktop calculates wages and/or payroll taxes incorrectly.

 

As always, you can contact our Desktop Payroll support if you need assistance in going through the steps. They can also help you locate if there are any discrepancies in your payroll report.

 

Let me know if you have additional questions about your Federal taxes. I'll be here to help however I can.

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

Its the employer portion of the federal unemployment it charged each employee 349.00 for the employer portion of the taxes

 

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

I already checked the employees, some did calculate right others didn't.  It did however calculate right on the last 3 pay runs but not this one and no one has been added or deleted, nothing changed from last payroll 2 weeks ago

Highlighted
QuickBooks Team

Federal Taxes Not Deducted Correctly

Thanks for following on this thread, @DPumpkin.

 

Taxes will not calculate correctly if the tax table is not updated, or if QuickBooks is doing an auto-correction. To fix the issue, let’s download the latest tax table version and perform a liability adjustment.

 

The previous process will provide the most current and accurate rates and calculations for supported state and federal tax tables. Here’s how:

 

  1. Go to the Employees menu on the left panel to choose Get Payroll Updates.
  2. This will take you to another window where you can mark the box for Download Entire Update.
  3. Then, select the Download Latest Update option.
  4. Another window will display stating the download is complete.

Next, pull up the Payroll Summary Report and then change the reporting period to This Calendar Year to see the up to date payroll data.

 

  1. Tap the Reports menu to choose Employees & Payroll and select Payroll Summary.
    adj.png
  2. On the report page, click the drop-down for Dates and choose This Calendar Year.
    adj1.png
  3. Hit the Refresh button to view the changes.
  4. From there, double-click on the Federal Unemployment amount in question.
    adj2.png
  5. Next, take note of the Wage Base and multiply it to 0.6% and then get the total amount of the product.
    adj3.png

Once you have it handy, enter a liability adjustment. The following article provides an overview of how to find the payroll discrepancies as well as for instructions to fix incorrect taxes: Adjust payroll liabilities.

 

Keep me posted if you need further assistance when working in QuickBooks. I’m more than happy to help. Have a good one. 

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

I am having the same issue. Payroll taxes are not be withheld correctly and some employees are having $0 withheld. I have QB Online, so shouldn't that automatically update?

Highlighted
Moderator

Federal Taxes Not Deducted Correctly

Hello there, jenhofstad.

 

It could be that they did not meet the taxable wage base, or your employee's setup was set to Don't Withhold for federal and state income taxes. Let's double-check your employee's filing status. Here's how:

 

  1. Go to the Payroll menu, then Employees.
  2. Select the name of the employee.
  3. Click the edit (pencil) icon beside Pay.
  4. Next to the withholding section, select the Edit  icon.
  5. Check the Federal Filing Status/State Filing Status. If it was set to Don't Withhold, change it to the appropriate option to correct the filing status.

 

For additional information, you can check this article: Federal and State Income Tax are Withheld in Accordance with IRS Publication. Also, you can read the articles below to learn more about employee tax exemptions and filing status:

 

Please comment again if you have other concerns. I'll be around to guide and help you out. Take care and have a good one!

Highlighted
New Member

Federal Taxes Not Deducted Correctly


@MichelleT wrote:

Hi there, Sunburst,

 

I can help check why the federal taxes are deducted incorrectly. I want to ensure correct taxes are calculated so accurate amounts are paid and filed to the IRS.

 

It's great that you've already installed the latest payroll updates. That knocks one step off of what we need to try next.

 

If it's the federal withholding that's not deducting correctly, you'll need to confirm the employees' profiles are set up correctly. QuickBooks calculates the federal withholding based on these factors:

 

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

 

Please follow the steps below to check the employees' profiles:

 

1.    Click the Employees menu.
2.    Select Employee Center.
3.    Double-click the employee’s name, one at a time.
4.    Click 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.    Click OK.
9.    Click OK again.

 

You can also try manually calculating one of the employee's paychecks to see if it matches QuickBooks. To help figure out the exact withholding amount, please go through the IRS 2018 Publication 15.

 

You can use the Percentage Method (page 44-45). It's the same method used by QuickBooks to calculate federal withholding.

 

If you need further assistance calculating federal withholding, you can contact me directly. I'll be here to help in any way I can.


All my paid taxes do not show and i received email something was due nut it not there anymore plus everthing is out of the place

Highlighted
QuickBooks Team

Federal Taxes Not Deducted Correctly

Hello there, @all my tax iformation is gone.

 

I'm here to help you check out why you're tax info is not there. Before that, I'd like to know if you've already paid your taxes. This is because the task or notification will not show if it has been paid.

 

Since you're not able to see the tax on due, I'd suggest performing the browser troubleshooting method. This is done to avoid saving the data in your browser when surfing the internet. There might have outdated data that needs to be refreshed. 

 

First, log in to your QuickBooks company using a private browser. If you're now able to see the taxes being paid and the tax to be paid, you can go back to your regular browser and clear the cache. An alternative way is to use another QuickBooks supported browser.

 

Here are the keyboard shortcuts to access an incognito browser:

 

  • Mozilla Firefox and Microsoft Edge: Ctrl + Shift + P
  • Google Chrome: Ctrl + Shift + N
  • Safari: Command + Shift + N

 

However, if it's still the same, I'd recommend contacting our QuickBooks Online Care Team. They have the tools to verify your account and get to the bottom of this.

 

I've added this article for your future reference in case you want to track the wages in your business: Run payroll reports.

 

Please don't hesitate to let me know if you have other questions in QuickBooks. I'd be happy to answer them for you. 

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