Paying Payroll Taxes in PROFIT.pdf by shensengvf

VIEWS: 0 PAGES: 3

									Paying Payroll Taxes in PROFIT

Document #     Product             Module                Category
Doc # 854      Profit              Payroll               Processes (How To)


This document explains how to obtain the correct liability amounts for payroll taxes and how to pay
those taxes


941 Tax Amounts (941 Federal Tax Deposit)
Generally, paying federal tax deposits affects the Federal Withholding Payable and FICA Withholding Payable
accounts. The amounts in these liability accounts represent the deductions from the employee checks, along
with the company tax liability. Verify which accounts are affected when you post payroll transactions from
Payroll for PROFIT, Setup>General Ledger>Payroll Proposed Posting Accounts. Under Transaction
Amounts to Post, look for the Federal Withholding Payable, the FICA Social Security Withholding Payable,
and the FICA Medicare Withholding Payable accounts. The two FICA accounts may post to the same liability
account or to separate accounts.

The expense accounts for each tax are the company portions of the payroll taxes. When paying any payroll tax,
ALWAYS use the liability accounts.

Quarterly Deposit Amounts
Select Reports>Tax>941 Worksheet. Generate this report by quarter only. The amount designated as Total
Income Tax Withheld is the amount for Federal Withholding. The amount of the Adjusted Total of Social
Security and Medicare Taxes is the amount for FICA Social Security and FICA Medicare.

Monthly Deposit Amounts
Select Reports>Employee>Tax. Produce this report by month(s), quarter(s), year, or range of months. It shows
the amounts for the employee portion of FICA Social Security and FICA Medicare, along with Federal
Withholding. To check the amounts of the company taxes, choose Reports>Company>Tax Expense for the
same period for which you ran the employee tax report. This report shows the amounts for the company portion
of the FICA Social Security and FICA Medicare.


The 941 deposit
1. From PROFIT from Champion, select Transactions>Checkbook>Miscellaneous Check. If you have the
   payment automatically deducted from your bank account, use the Withdrawal from Bank form instead.

Complete the top portion of the form as normal. At the bottom of the screen, click Options>Split Transaction.
Record the amounts for each of the appropriate accounts. Select the account for the Federal Withholding
Payable and enter the amount from the 941 Worksheet for Total Income Tax Withheld. On the next line, select
the account for the FICA Social Security Payable and FICA Medicare Payable and enter that amount,
remembering that these accounts may be the same.




Red Wing Software
491 Highway 19
Red Wing, MN 55066
support@redwingsoftware.com                                                                        Page 1 of 3
www.redwingsoftware.com                                                                Last Reviewed: 11/05/03
Note: When paying Payroll Taxes, post against the liability account, not the expense account. The liability
decreases by the amount paid. As you post more Payroll transactions, the amount owed increases. You can
review the amount you owe for payroll taxes at any time by accessing the Balance Sheet to find the current
balances in these liability accounts.

FUTA Taxes
Generally, the account affected when paying FUTA taxes is the FUTA Tax Payable. Verify this account by
choosing Setup>General Ledger>Payroll Proposed Posting Accounts. Under Transaction Amounts to
Post is the FUTA Tax Payable account.

Select Reports>Tax>940 FUTA. This report gives you the necessary information to pay the 940 FUTA tax. View
this report by month(s), quarter(s), year, or range of months. To pay 940 FUTA, follow the same steps shown to
make the 941 deposit; use the FUTA Tax Payable account instead of the FICA Payable account(s).

Paying Workers’ Compensation Taxes
In Setup>General Ledger>Payroll Proposed Posting Accounts, under Transaction Amounts to Post, each
state having Workers’ Compensation should have an account number listed. Most companies set up individual
liability and expense posting accounts for each state.

Select Reports>Company>Workers’ Compensation. This report shows the amounts due for Workers’
Compensation for each state. View this report by month(s), quarter(s), year, or range of months. To pay
Workers’ Compensation, follow the same steps shown to make the 941 deposit; use the Workers’ Compensation
Payable account(s) instead of the FICA Payables account(s).

Paying State Taxes - State Wages and SUTA


State Wages
In Setup>General Ledger>Payroll Proposed Posting Accounts, under Transaction Amounts to Post, each
state set up is listed individually. Generally, companies set up individual liability posting accounts for each state.

Select Reports>Tax>941A State Wage Worksheet. This report shows the amounts due each state for taxes
withheld from employees. View this report by month(s), quarter(s), year, or range of months. To pay State taxes,
follow the same steps shown to make the 941 deposit; use State Withholding Payable account(s) instead of the
FICA Payable account(s).


SUTA
Generally, the account affected when paying SUTA taxes is the SUTA Tax Payable account. In Setup>General
Ledger>Payroll Proposed Posting Accounts, under the Transaction Amounts to Post, find the SUTA Tax
Payable account. Generally, companies set up individual liability and expense posting accounts for each state’s
SUTA tax.

Select Reports>Tax>SUTA. This report shows the information needed to pay the SUTA tax. View this report by
month(s) or quarter(s) year, or range of months. To pay SUTA, follow the same steps shown to make the 941
deposit; use the SUTA Tax Payable account instead of the FICA Payable account(s).




Red Wing Software
491 Highway 19
Red Wing, MN 55066
support@redwingsoftware.com                                                                              Page 2 of 3
www.redwingsoftware.com                                                                      Last Reviewed: 11/05/03
Paying Local Taxes
In Setup>General Ledger>Payroll Proposed Posting Accounts, under Transaction Amounts to Post, each
local tax is listed individually. Generally, companies set up individual liability posting accounts for each local tax.

Select Reports>Employee>Tax. This report shows the local taxes collected. View this report by month(s),
quarter(s), year, or range of months. To pay Local Taxes, follow the same steps shown to make the 941 deposit;
use the Local Tax Payable account(s) instead of the FICA Payable account(s).

Pay Employee/Company Contributions
In Setup>General Ledger>Payroll Proposed Posting Accounts, under Transaction Amounts to Post, each
employee contribution is listed individually. Employee contributions are listed as Deductions Payable, i.e., FICA
Withholding. They represent no expense to the company. These are amounts withheld from employees’ checks
by the company for tax payments. Company contributions are listed as Contributions Payable, i.e., FICA
Payable. In addition, there may be a company expense associated with the contribution, i.e., FICA Expense.

When you process payroll, PROFIT records the company Contributions Payable and sets up the company
contribution expense. Therefore, when you pay the taxes, i.e., FICA, you post the payment to the tax liability
account. When taxes have both an employee contribution and a company contribution, assigning the same
account number to the contributions simplifies your record keeping.

In Reports>Employee>Contribution, find the amounts for the employee contributions. In Reports>
Company>Contribution, find the amounts for the company contributions. Both of these reports show the
amount collected for each contribution. View this report by month(s),quarter(s), year, or range of months. Pay
these contributions by following the same steps shown to make the 941 deposit; use the individual Payable
accounts for the contributions instead of the FICA Payables account(s).

Scheduling Payments for the Future
Since the payment of payroll taxes and contributions usually occurs at regular intervals, you may want to
schedule payments for the future. When you do this, PROFIT reminds you when it is time to pay the taxes.

Taxes are paid from the Miscellaneous check or Withdrawal from Bank forms. When you schedule payments,
the forms automatically have the correct accounts selected.
1. To schedule tax payments, before posting the form, click Options>Schedule for Future. Choose the
    Frequency of payment--monthly, quarterly, etc).
2. Enter the next scheduled date for the transaction. (To print a check today, make today the next scheduled
    day).
3.
To set up the future transactions to remind you a couple of days in advance when taxes are due, select
Edit>Reminder for Future Transactions from the top of your screen.

Hint: To schedule a check for the future in PROFIT, select Generate Computer Check, even if you never use
that option and always record checks using the Record Handwritten Check option. Then, when it is time to post
the check, choose Print. Print the check to plain paper and then post it. For more information on Scheduling for
Future, see the Scheduling for Future Chapter in the User’s Guide.




Red Wing Software
491 Highway 19
Red Wing, MN 55066
support@redwingsoftware.com                                                                              Page 3 of 3
www.redwingsoftware.com                                                                      Last Reviewed: 11/05/03

								
To top