Entering old 941 underwithholdings

You don't need to use debit and credit to record your payments in Journal Entry, chasingcheddar. I'll share more information on how you can record your previous payroll data.

When processing payments for prior quarters, you can utilize the backdoor method. However, it is advisable to consult your accountant during this procedure to ensure the accuracy of your financial records.

Here's how:

1. From the Help menu, choose About QuickBooks.
2. Press Ctrl + Alt + Y or Ctrl + Shift + Y to open the Setup YTD Amounts window.
3. Select Next until you reach the Enter Prior Payments section.
4. In the Enter Prior Payments window, select Create Payment to enter all prior payroll tax and non-tax payroll liability payments you have made during the current or previous years.
5. Enter the Payment Date and For Period Ending date accordingly (in many cases these dates will be the same). On the other hand, please proceed if there's already an item in the given field.
6. In the Taxes and Liabilities field, choose the payroll tax item that you already paid and want to record in QuickBooks Desktop, then enter the amount. You can add a memo to remind you what the payment is for.
7. Select the Accounts Affected... button.
8. You'll be prompted if you want to affect your liability account balances. You can choose either Do not affect accounts, Affect liability accounts but not the bank account, or Affect liability and bank accounts.
9. Once done, click Next Payment. Follow the on-screen process, then select Done.
10. Select Finish to close the window.

For more information about recording your previous tax payments, please refer to this article: Enter historical tax payments in Desktop payroll.

Additionally, you can use this article if you want to add paychecks, tax payments, and non-tax payments you already paid this year: Add payroll info to QuickBooks Desktop Payroll when you already paid employees this year.

Please feel free to let us know if you need further assistance when recording the previous 941 payments, chasingcheddar. We'll be here to help you out.

Thank You. I just saw this and will give it a try. I have a CPA but they don't use QB so it gets a little challenging on some issues.

On step 8, if i choose to adjust and affect the bank account, will QB create Liability event under the "Pay Taxes & Other Liabilities" menu for me to pay the additional taxes or will it automatically create entries that show these taxes were paid in the checking account, which is where they are setup to be paid? I have paid the taxes already (outside of QB).

Since I paid this outside of QBs, do I just follow your steps to adjust the liability account and then adjust the expense account in my primary checking acct against "Payroll Liabilities", which is where it would be paid if QBs made the payment automatically.

Thank you for your prompt response, @chasingcheddar. Allow me to add some important details to the steps you've already followed.

Since you paid taxes outside QuickBooks, you can choose between: 

• Do not affect accounts: Choose this option when the balances in your QuickBooks accounts are already accurate and you do not need to make any changes. This selection means that the prior payment will not appear in the bank register. It's useful for cases where you're entering data for record-keeping purposes without needing to adjust financial balances in QuickBooks.
• Affect liability accounts but not the bank account: This option is appropriate when the balance in your checking account is accurate and should remain unchanged, but you need to update your liability accounts. By selecting this, QuickBooks will adjust the liability balances to reflect the payment without changing the bank account balance. The prior payment will be recorded in QuickBooks to correct the liability accounts but will not show up in the bank register.
• Affect liability and bank accounts: Use this option when both sets of account balances, liabilities, and the bank, are incorrect in QuickBooks. Choosing this setting ensures that the prior payment affects both types of accounts, making it appear in the bank register and adjusting the relevant financial records. This option is suitable when you need to fully incorporate a payment into your books to correct all related balances.

After checking, you can now record and complete the steps accordingly.  

Additionally, you might want to visit this helpful resource and learn how to add paychecks, tax payments, and non-tax payments you already paid this year to QuickBooks Desktop Payroll: Add payroll info to QuickBooks Desktop Payroll when you already paid employees this year

Keep me in the loop if you have any clarifications about recording payments. I'd be glad to assist. Have a great day ahead. 

Thank you for the clarification. So by choosing "Affect Liabilities and bank accounts", QB will show the additional payment and the original payment (which was underpaid) in liabilities but will only show the additional payment in the bank account? 

Thank you for your continued engagement in this thread, chasingcheddar. I'd gladly share additional details about recording your previous 941 payments in QuickBooks Desktop (QBDT).

Yes, you’ve got it right. When you select the option "Affect Liabilities and Bank Accounts" in QBDT, it specifically affects how payments are recorded for both liabilities and bank accounts. Selecting this option will cause the prior payment to appear in the bank register.

You can also visit this article for additional information when entering historical tax payments that you made during the current or previous years before using the payroll service:
Enter historical tax payments in Desktop payroll.

Here are articles to help you add paychecks, tax payments, and non-tax payments you already paid this year to the program and customize payroll and employee reports:

• Add payroll info to QuickBooks Desktop Payroll when you already paid employees this year.
• Customize payroll and employee reports

Feel free to reply or post new inquiries about recording the previous 941 payments in QuickBooks Desktop. The Community is always ready to assist you.