How to post withholding taxes in Desktop

Hello Simple,

Thank you for reaching out to the QuickBooks Community! I will be more than happy to share how to set up manual payroll without a QuickBooks Desktop. Before you set up manual payroll, be sure to update your version of QuickBooks so you get the latest fixes and improvements. Here's how:

1. From the Edit dropdown menu, select Preferences.
2. Choose  Payroll & Employees, then select the Company Preferences tab.
3. In the QuickBooks Desktop Payroll Features section, select the Full payroll and the Manual Payroll checkboxes.
4. In the Get payday peace of mind window, select Next and then Activate in the confirmation screen.
5. Clck OK to apply the changes.
6. Select OK to exit out of the preferences window.

Please let me know if there is anything else I can asisst you with! See you around. 

Thank you for responding. But what I need to know is “where” do I post the taxes the government withdraws each quarter? They do an automatic w/d from the church account for the two employees taxes. I am not sure how and where to post the withdraw.

@Simple  I don't use Mac, but I do want to address what appears to be a misunderstanding on your end.

The Federal Withholding tax payments should not be treated as expenses.

An employee's Gross Wages are generally already categorized as payroll expenses.

Federal Withholding is one of the payroll taxes that come out of these Gross Wages to arrive at Net Wages.

If you were to try to categorize the Federal Withholding payments as an expense, you would be double-counting expenses that are already recognized in the Gross Wages that you have presumably recreated as part of the paychecks you've been mirroring into QuickBooks.

For instance, if you had someone with $100.00 Gross Wages for a paycheck, and they had $5.00 Federal Withholding, attempting to recognize the Federal Withholding tax on that as an expense would lead to you claiming both the $100.00 Gross Wages as payroll expense, and the $5.00 Federal Withholding as payroll expense, for a total of $105.00, more than the employee had in Gross Wages at all.

Federal Withholding is a Liability you are paying, in short, not an expense.

Ok that makes sense. I’m no accountant and not sure how or where to post these withdraws quarterly. So do I need to set the person up as an employee in QB and post their monthly pay there? And then the taxes they automatically withdraw for that person on the employee liabilities? 

@Simple  I'm a bit unsure of how the process works when you're basically just summarizing payroll expenses over into QuickBooks from another source.

I would suppose that you create a GJE to mirror the gross pay (payroll expenses), taxes that come out of the paycheck (Payroll Liabilities), taxes that are owed on the paycheck (Unemployment and such, which can be treated as Payroll Tax Expense), and whichever bank account they are written out of.

Then, you would have an existing balance of Payroll Liabilities to pay off in the form of your automatic tax payments.

@BigRedConsulting  and @Rainflurry  would likely have more direct experience with this kind of thing, having worked in this field longer than I have.

There may be some more direct functionality in QuickBooks that would allow you to mirror the payroll as well, without having to pay their ridiculous payroll fees.

@Simple  To be a bit more clear in regards to the 'taxes owed on the paycheck' bit, you'd likely be setting payroll tax expense against payroll liabilities in the GJE. This would be because these taxes do not interact with the bank account until such time as the liability is paid.

The payroll tax expense is still typically recognized as of the date of the paycheck it's tied to, though.

If you want to do this in a Write Checks window you can do something similar to the following: