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To allow taxes to be withheld from wages paid to employees, taxable third-party sick pay should be included with a regular paycheck whenever possible. If it's not possible, then an employee advance may be necessary to cover your taxes.
Initially, you'll need to create an expense account to track their sick pay.
Here's how:
Next, you'll need to create an additional payroll item, a deduction item, and an employee advance.
If there's any questions, I'm just a post away. Have a wonderful day!
I also have the same problem. We do not pay the short term disability out, another company does. But we are responsible for the employers share of Medicare and social security tax that was paid out, as well as reporting the income the employee received. How do I account for those taxes to match my 941 without creating extra liabilities?
Let me guide you on recording taxes in QuickBooks Desktop to match your 941 without creating extra liabilities, Ktranspinc.
Before anything else, you'll need to set the disability tax to the employee profile since this is included in their paychecks.
On the other hand, to record the taxes in QuickBooks Desktop, here's how:
The steps I've provided are for recording purposes only. I'd still recommend contacting your accountant for further advice. If you don't have one, you can find a professional through this link: https://quickbooks.intuit.com/find-an-accountant/.
Furthermore, if you want to look closely at your business's finances, you can run a payroll report. It will provide a detailed summary of your company's payroll expenses, including employee salaries, bonuses, taxes, and other related costs.
Just click the reply button below if you need further clarification about recording taxes. I'm still here to back you up, Ktranspinc.
I have a similar problem. We do not pay the short term disability, another company does and this company also pays the social security and Medicare tax. We are responsible for the Federal Unemployment and State (Virginia) Unemployment taxes. How do I account for these taxes? I am using QuickBooks Desktop.
Thank you
Hi, @Renee87. I can help account for the Federal Unemployment (FUTA) and State Unemployment (SUTA) taxes in your QuickBooks Desktop (QBDT).
Since another company pays for the short-term disability insurance, you only have to record the payments FUTA and SUTA. Before performing the steps below, please confirm that your QBDT Payroll is up-to-date to ensure you have accurate rates and calculations for federal and supported state taxes.
First, you'll need to set up payroll items for FUTA and Virginia SUTA if you haven't created one yet.
Next, if you're recording taxes for payments that were made in a previous period, please refer to this article for the detailed guide: Enter historical tax payments in Desktop payroll.
Once done, you can then pay the current FUTA and SUTA tax liabilities. Here's how:
As a future help, let me add this article in case you run into QBDT company data integrity problems: Verify and Rebuild Data in QuickBooks Desktop.
We're always here in the Community should you need further assistance setting up and paying FUTA and SUTA taxes in QBDT. We'll do our best to assist. Take care.
Thank you for your response. It was very helpful!
Hello, Renee87.
Thank you for returning to this thread and confirming that my colleague's suggestions above worked for you. It's our main priority to help you navigate through QuickBooks with ease.
We're glad to help you with any issues related to QuickBooks. If there's more, feel free to get back to this thread. We're always here for you 24/7.
I have an employee that is receiving LTD, the Medicare and SS tax is being deducted however we are responsible for preparing the W2 for the disability benefits paid to the employee. How do I enter this in QB desktop?
You can create a company contribution item in QuickBooks Desktop (QBDT) to record the disability benefits provided to your employee. dwalker2. I'll guide you through the setup process.
To begin, go to the Lists menu and select the Payroll Item List. Follow the steps outlined below:
Once done, add the item to the employee profile. Here's how:
Check out this article for detailed guidance on handling payroll items related to your insurance benefit scheme: Set up and manage payroll items for your insurance benefit plan.
Furthermore, you can generate a payroll summary report within the software to monitor the payments made through your QuickBooks payroll system moving forward.
Kindly reach out anytime if you have more questions or need assistance managing payroll-related queries. Just come back to this message, and I'll be here to help you promptly. Stay safe.
We don't pay the disability income benefit our insurance company does and they deduct Medicare and Social security Tax. We are to prepare the W2 for the disability benefits paid to the employee.
Hi there, dwalker. We can create company liability adjustments since your insurance company pays the disability income benefit and deducts the Social Security and Medicare taxes.
To create a company liability adjustments:
You might also want to run a payroll report to see a detailed summary of your payroll expenses, including employee salaries, bonuses, taxes, and other related costs in the future.
Moreover, I'll add these articles as a guide in filing W-2 and managing your employee's paycheck in QuickBooks Desktop:
You're always welcome to revisit this thread whenever you require assistance entering a transaction or recording disability benefits paid by insurance companies. I'm here to help you anytime.
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