How do you enter 941 tax payments made outside of Quickbooks that are adjustments to previously paid 941 payments through Quickbooks payroll?

Hello, @chasingcheddar. It's definitely concerning to get information that you have several quarters that are short from the IRS. I'm glad to see you taking a proactive approach to addressing those additional 941 payments! Let’s walk through how to seamlessly integrate them into QuickBooks Desktop (QBDT) so you can get everything back on track.

When you find discrepancies in your payroll liabilities, making a liability adjustment can be a great solution. Here are some common scenarios that might prompt you to make these changes:

• Fixing a payroll item with the wrong tax tracking type.
• Correcting year-to-date (YTD) wages, taxes, and deduction items.
• Changing the amounts for company contributions, like HSA or 401(k) matches.

Before diving into the modification, I recommend running a payroll summary report for the month or quarter you need to correct. This will help you identify the specific payroll items that require corrections.

Now, let’s go through the steps to adjust your payroll liabilities:

1. Navigate to the Employees menu, then Payroll Taxes and Liabilities.
2. Choose Adjust Payroll Liabilities.
3. For both the Date and Effective Date, select the last paycheck date of the affected month or quarter.
4. In the Adjustment is for: section, pick Employee Adjustment to correct your employee's YTD info. Then, choose the employee's name.
5. Select the payroll item you want to adjust under the Item Name column.
6. Input the amount of the adjustment.
   • If the item is under-withheld, enter a positive amount to increase it.
   • If it's over-withheld, enter a negative amount to decrease it.
   • If necessary, type the adjustment amount in the Income Subject to Tax column for wage base changes.
7. Include a note in the Memo field for future reference.
8. Choose Accounts Affected, then OK.
   • Pick Do not affect accounts if you want to keep the balances unchanged for your liability and expense accounts. This way, the adjustment will only modify the YTD amounts reflected in your payroll reports.
   • Alternatively, pick Affect liability and expense accounts to update those balances.
9. Click OK to close the Affect Accounts window.
10. If you need to enter adjustments for additional employees, hit Next Adjustment. Otherwise, select OK to save your changes.

Once you’ve made the adjustments, running the payroll summary and payroll liability balances reports will help you confirm everything looks correct.

For more detailed guidance, check out this helpful article: Adjust payroll liabilities in QuickBooks Desktop Payroll.

You’re doing a great job keeping everything organized, and I’m here if you have any more questions or need support as you work through this process. Wishing you a smooth path ahead with your payroll records!

jeanbiverly

I need to provide a little more clarification on this issue.  In late 2024, the IRS sent me statements that I underwithheld 941 payments in specific quarters of years 2022 and 2023. I have since paid these by autodraft from our only checking account. I have not put entries into Quickbooks.

I use the 2024 desktop version of Quickbooks.  I don't know how to enter the credits and debits for these payments. QB payroll automatically adjusts these accounts so I don't know what all accounts are affected.

What accounts should I credit and debit to account for these payments "additional" 941 payments? I'm sure I have to create a liability to generate the demand for the IRS payments and I have to post these payments to some expense account.  Do these accts already exist or do I need to create them? Should this be general ledger entries?

I'm sure this doesn't affect the taxes for 2024 but it does impact cash flow, which needs to be captured.

Any assistance is greatly appreciated.

Thank you for getting back here in the thread and providing more details about your query, @chasingcheddar.

It looks like you've already posted the same query here in the Community space, and one of our colleagues was able to provide a recommendation to help you address this situation. Please see this page to see her response: https://quickbooks.intuit.com/learn-support/en-us/reports-and-accounting/re-entering-old-941-underwi...

I'm all ears if you require further assistance entering an additional 941 payments in QuickBooks. Please let me know in the comment section so I can get back to you and lend a helping hand. Keep safe.

So the community is refusing to provide any personal knowledge or experience? I need to purchase a response to this issue? Small companies can't afford to purchase every answer. I thought this was why the community was developed in the beginning. Am I wrong?

Kurt,

Does step #8 in the recommended procedure provided mean that if I follow this process it will make the proper adjustments to the liability and expense accounts? How does this affect the cash flow for year 2024 since the tax years affected by the underwithholding are years 2022 and 2023?