When I set up my Quickbooks at the beginning of 2018, I inadvertently created a new Expense category called Payroll Taxes. I did not use Payroll Liabilities and was not even aware that it was there. Now I have a huge payroll liabilities amount that I need to correct, and am not finding much help on how to do this...
Hello there, @trdavis55.
Thank you for dropping by. I can help you edit your payroll items to correct your payroll liabilities mapping and pay your taxes.
Let's start with editing your payroll item's liability account from Payroll Taxes to Payroll Liabilities. Please follow the steps below:
After updating the liability account, there will be a pop-up message that will allow you to update your transactions according to the date you specify.
Once done, you can proceed with paying your liabilities. In case you've already paid them, you have to make sure you record them in QuickBooks. To do that, you can use the enter prior payroll feature.
That information should get you on the right path.
Let me know if you have additional questions about payroll. I'd be glad to help you more. Wishing you and your business continued success.
Are you stating you paid taxes manually as Expense, or have you at least been using the Pay Liabilities tools? As long as you Paid Liability using the tool, then in QB, edit any payroll item that is supposed to be Expense + Liability (employer taxes) or only liability (employee taxes) and after you fix the item, let QB move existing data. Review this with your CPA, since Expense has been wrongly stated for the periods you did this.
If you never used the Pay Liability tool and always use manual Write Check as expense, that is a much deeper error to fix.
Thank for providing extra details, @trdavis55.
I recommend getting in touch with your accountant for guidance about recording liabilities and writing checks in the best way for your business.
Let us know if you have other concerns about payroll in QuickBooks. I'd be happy to help you more. Wishing you all the best.
You have just given the worst guidance possible. Please learn from what I am going to explain, as this is Important to all QB desktop users that also use the program to run payroll.
You never use Write Check for payroll. The special Liability Check needs to be created. Look at the Tabs; a regular Write Check has an Expense and an Items tab. You need to be looking at a Pay Liability check, which has the Expense and the Liabilities tab. You need to use the function because when you are running payroll, every data flow to the accounting is controlled by the Payroll items. If you use Bills or Checks or Journal Entries, or even Credit Card Charges as the transaction type, you just Broke the relationship between the Payroll functions, Payroll Liabilities tracking, due dates, State and Federal Reporting. Even if the accounting seems correct, because someone at the least knew to post a payment from Liability and not as More Expense, they still Broke QB Payroll.
The Payroll Center has the functions for Paying Liability. If you see nothing listed there for paying liabilities, that just means no one took advantage of the Setup function as a reminder. This is called Schedule Liabilities, which allows you to have the program remind you by showing "this is due monthly" and "this is due quarterly", etc. So you would use Create Custom Liability Payments, for each Liability Period cycle, to see and select and Pay what you accrued from each payroll run. Open any Paycheck details. See the tax items on the bottom left and right? These Payroll Items are part of what is Listed when you properly Pay Liabilities. The Payroll Item flows all data for you. Run the Payroll Liability Balances Report, set it for All Dates, and Columns by Year. This is supposed to be Total = 0, if you think you paid everything.
And this is not going to be resolved via a text-based forum. The errors made by using regular Checks, and double-error posting it as More Expense, means the payroll tools were not used properly, and these prior payments need to be corrected or offset using the proper Pay Liability function. The entry of that Banking as Expense means the P&L is wrong for these timeframes, as well. And the State and Federal Reporting will need to be reviewed and likely corrected or amended. Plus, if this happened in prior tax reporting years, the business tax reporting might also need to be amended.
It's time to get direct personal help from a local provider who can review methods and accounting, and get you on track. Find someone that understands QB Payroll.
You never use Regular Checks, JE, Bills or Credit Card Charges for QB Desktop Payroll; these bypass payroll and are raw accounting. Not Payroll.
I've never used the pay payroll liabilities feature in QBs. We have an external system for payroll, so we don't use the payroll feature in QBs. We use manual checks to pay the liabilities.
How do I get QBs to allow me to use manual check to pay the payroll liabilities and not the pay payroll liabilities feature?
I've never used the Pay Liability tool and always use manual write check to pay the liabilities. We use an external payroll system for payroll not QBs.
How do I get QBs to allow me to use manual check to pay the payroll tax liabilities without using the pay payroll liabilities tool?
Hi there, @TH21.
We can use the Write Checks function since you don't have the QuickBooks Payroll function activated. Just make sure to use the correct expense accounts when creating manual checks. This way, we can make sure that these transactions are reported under the correct accounts when running your financial report.
Here's how you can write checks in QuickBooks Desktop:
Once done, you can run the Check Detail report to view the details of every check that you've created in QuickBooks. Just to go Reports and select Banking. Then, click Check Detail.
The Community always has your back, so please let me know if you have other questions.
We do have payroll liabilities in QBs, but do not use the payroll function.
When I try to pay the payroll liability by just writing a manual check in QBs, I get the QB message that I'm trying to pay payroll liabilities and I need to use the pay payroll liabilities tool.
Is there a way to turn that off so it won't come up and I can use the manual check to pay the payroll liabilities?
You can turn off the pop-up messages from the settings. Let walk you through how.
You can also check our in-product help articles for additional resources. Just press F1 on your keyboard.
That'll do it. Please know that you're always welcome to swing by anytime if you have other questions. We're always here to help. Thanks for visiting us and have a wonderful day.
That didn't solve my issue.
I need to be able to write manual checks to pay payroll tax liabilities. We do not use the payroll module in QBs and I've never used the pay payroll liabilities tool.
When I go to write a manual check for payroll tax liabilities, the problem window pops up and says that I need to use the pay payroll liabilities. I don't want to use that. I just want to write a manual check for the payment. How do I turn off the tool/function of pay payroll liabilities?
Hello there, @TH21.
Thanks for following up on this thread.
At this time, QuickBooks Desktop doesn't have the option to turn off the Pay Payroll Liabilities tool. I'm going to submit feedback to our Product Development Team for them to review and consider making this an option soon.
For now, you can follow up on our QuickBooks Blog website for any future product updates.
If you have any more questions or concerns, please don't hesitate to comment below. Have a safe and productive rest of your day!