I set up the Simple IRA employee contribution to be paid via direct deposit (from the employee's paycheck). The amount withheld (and paid) is also showing as a payroll liability (separate from the employer contribution). How do I indicate the payroll liability has already been paid via direct deposit?
Thanks for getting in touch with us today, Spanic,
I can share some insights about processing Direct Deposit transactions and paying tax liabilities in QuickBooks Desktop.
The Direct Deposit feature in QuickBooks allows you to process your payroll checks electronically. However, this feature does not handle tax payments. What gets deposited to your employee's bank account is only their net check amount excluding all other tax deductions.
The system automatically separates your payroll liabilities (employer and employee taxes) from your payroll expenses (wages). What you can do to clear the Simple IRA employee contribution from your tax dues is to create a liability check to record the payment in QuickBooks. Once you have the liability check, you can pay the amount to your agency together with the employer contribution.
Here are helpful articles to guide you on how to pay your taxes in QuickBooks:
That's the issue, the liability has already been paid via direct deposit. On the employee record I have set up two direct deposit accounts - one for their net paycheck and one for their portion of the Simple IRA contribution. There is no further liability to pay, yet the system thinks there is.