cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

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)?

Solved
Best answer January 23, 2019

Best Answers
Highlighted
QuickBooks Team

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

15 Comments 15
Highlighted
QuickBooks Team

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

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

I have checked all the payroll information for employees and have ran all the updates.  I have also contacted payroll support and they too went through all my employee information to see that the setup was correct. 

 

I am on my 3rd payroll of the new year and still can't get this resolved.  I really don't have time to re-calculate everyones payroll withholding  for the rest of the year.  I would greatly appreciate some solution to this issue as I have been trying for the last month to resolve this issue. 

 

As far as I can tell, the federal withholding is the only tax not calculating. 

 

Thanks

 

Highlighted
QuickBooks Team

Federal Taxes Not Deducted Correctly

Thank you for joining the thread, @MCSO.

 

Be sure to update your payroll tax table to the latest release so QuickBooks will calculate payroll taxes correctly.

 

Here's how:

 

  1. Open your QuickBooks Desktop (QBDT), then click on Employees at the top menu bar.
  2. Tap on Get Payroll Update from the drop-down result.
  3. Select the radio button beside Download entire payroll update, then click on the Update button.

 

If you have pending paychecks from the Enter Payroll Information window, right-click on the paycheck, then click on Revert Paycheck undo the changes. Once completed, re-enter the paycheck details to ensure taxes are calculated correctly.

 

For additional reference about this action, read this article: How to save or revert pending paychecks.

 

Also, here are the lists of articles you can read more about paychecks calculation in QBDT:

 

 

Leave a comment below if you have any other questions. I'm a few clicks away to help. Have a good day!

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

I appreciate your help but it's not working.  I have done all the updates and checked everything. 

 

I was on the phone with support for 1.5 hrs last week and they checked everything too.  I have compared everything to last years payroll and it all seems to be set up the same.

 

I feel like it is something simple but nothing is working.  I am going to contact support again.  I have a payroll due tomorrow and I have to get this corrected. 

 

Thank you for trying.........

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

Hi,

I’m an employee at a place who uses quick books and I have been having the same issues with my pay check! Even my W-2 for 2019, it showed that I had $0 federal taxes withheld. We rechecked my paper work and forms and it’s all correct and even still, I have $0 withholding for federal taxes. My boss talked to support and an accountant but apparently they’re saying that it’s right that I have $0 withholding. I don’t know if this is just a new tax thing going on but it doesn’t sit right with me. No one can tell me why my paycheck isn’t getting federal withholding while others are which I find really disturbing. It messed me up when I did my tax returns this year. I had to owe the state and barely got anything for my federal. Someone needs to look into this or at least explain why this is happening.

Highlighted
QuickBooks Team

Federal Taxes Not Deducted Correctly

Hello there, @pxfelicitas

 

Welcome and thanks for joining in this conversation. Certain factors affect the withholding calculations are the following: 

 

  • agency's wage and tax calculation table
  • employee's filing status, number of allowances, or extra withholding amount in the employee setup
  • pre-tax deduction items included on the paycheck
  • changes in pay frequency (creating extra paycheck outside of normal pay schedule)
  • creating a paycheck with wages that has lesser or larger amount than what the employee normally gets in a pay period

 

To learn more about how QuickBooks calculates taxes and understand the tax amounts reported on your paycheck or the year-to-date (YTD) payroll report, you can refer to this help article: How QuickBooks calculates payroll taxes

 

You can also see these resources from the IRS and the State agency. 

 

 

Feel free to message again if you have additional questions. We're always delighted to help you more. 

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

Got it. Thanks

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

I was able to fix it for employees who receive paychecks but what about those who get direct deposit and has already been processed?

Highlighted
QuickBooks Team

Federal Taxes Not Deducted Correctly

We automatically correct it on the next succeeding payroll, JMPC. 

 

We'll process that taxes that were not previously taken out to the next payroll we'll run. We can pull up the Summarize Payroll Data in Excel report to see the comparison from the previous and current payroll. 

 

I'll show you how:

  1. Click the Reports menu and choose Employees & Payroll.
  2. Select Summarize Payroll Data in Excel. 
  3. From the Excel file, click Enable content button from the menu. 
  4. Select the Dates we'll want to pull up.
  5. Click Get QuickBooks Data
  6. You can use the Filter buttons.

If you need anything else, just mention me and I'll keep an eye on your reply. Thanks!

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

I am having this same issue and have tried everything I've seen suggested. Did you ever get a solution?

Highlighted
QuickBooks Team

Federal Taxes Not Deducted Correctly

Hi there, @lstreicher

  

I appreciate following the steps provided above. Since you've tried the suggested solution and work-around. I recommend contacting our Customer Support Team

as they have the tools to pull up your account in a secure environment.  

 

Here's how: 

 

  1. Log in to QuickBooks.
  2. Go to the Help menu and select QuickBooks Help.
  3. Click Contact Us

Take a look at this article to know more about the calculation of taxes and understand the tax amounts reported on your paycheck or the year-to-date (YTD) payroll report: How QuickBooks calculates payroll taxes

  

Please don't hesitate to let me know if you should have any questions about this or anything else QuickBooks related. Have a wonderful day!

Highlighted
Level 1

Federal Taxes Not Deducted Correctly

Hello, 

 

We had this issue with one payroll period, after a payroll update. Zero Federal taxes were taking out including Medicare Employee, Medicare Company, Social Security Employee and Social Security Company AND Federal Withhold. 

All self adjusted on the next pay period, however Federal Withholding DID NOT. Is there a way to fix this as it is affecting my 941 filing. It is the exact amount off of what should have been taken our from Federal Withholding. 

 

I have adjusted all in the employee payroll liabilities section, but Federal Withholding will not budge. 

 

Any advice on how to adjust this or make this right?

QuickBooks Team

Federal Taxes Not Deducted Correctly

Hello there, @Haley444.

 

There are possible reasons why your federal taxes aren't calculating properly.

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

In the meantime, if it's the federal withholding that's not deducting correctly. You’ll need to review the employees’ profiles if they are set up correctly.

 

Here’s how:

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

 

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

Hello There, 

 

We did the update and the correct taxes were taken out for all but the federal withholding on the next pay period. This is the only item that did not self correct when the next payroll was ran. 

 

Is there a way to manually pull Federal Withholding?

 

Thank you, 

 

Highlighted
Moderator

Federal Taxes Not Deducted Correctly

I'm glad you reached Community and be able to share with me your concern, Haley444.

 

Yes, you can manually pull Federal Withholding in QuickBooks Desktop. To get this information, we will need to follow the few steps below that'll guide us further in getting this necessary details.

 

  1. Go to Reports from the main menu.
  2. Select Payroll Summary under Employees & Payroll.
  3. Make sure to select the appropriate date range and other fields that need to be sorted.

 

I've added a screenshot for additional reference:

heyey.PNG

 

For more tips and information about customizing the reports in QBDT, you can check out here: Personalizing QuickBooks Desktop reports.

 

I'd be glad to assist you further if you have additional questions. With that, you can mention me anytime. I hope you're good. Keep safe!

Need to get in touch?

Contact us