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Automate Paying Payroll Taxes in QuickBooks

Use the Payroll Center to streamline your payday tasks.

As Intuit makes changes to QuickBooks, some users are more eager than others to adopt the new tools. For example, the Payroll Center has existed in QuickBooks for several years now. Still, some users continue paying payroll taxes with the older system.

Many QuickBooks classes teach the payroll portion of the software, and a lot of time used to be spent teaching students how to prepare payroll tax liability payments from this window:

QuickBooks Training 091713 image 1

 To see this screen, go to Employees | Payroll Taxes and Liabilities | Create Custom Liability Payments

In the above screenshot, what is often called a 941 payment is being created. The payroll dates must be entered correctly each time, and the correct tax lines must be selected.

Notice the checkmarks circled along the left side of the graphic. QuickBooks didn’t make these selections. The QuickBooks user must make these, remembering which tax lines to use with a 941 payment each time.

The much-improved method for tracking payroll taxes is shown below.

QuickBooks Training 091713 image 2

  Paying payroll taxes from the QuickBooks Payroll Center

The improvement is obvious. To make that 941 payment, select one line that is clearly marked as to its intent (Federal 941, 944, 943). The due date is shown for the QuickBooks user; there’s no guesswork.

You may have seen this in a QuickBooks training class. If not, here’s how to do it.

The bottom arrow in the screenshot of the QuickBooks Payroll Center points to the Related Payment Activities tab. Click on that, and a menu opens, with one of the selections being Edit Payment Dues Date | Methods.

If you choose that option, the Payroll Setup window opens, and the Tax Payments section is displayed. There is a brief explanation in the initial window. Click Continue.

If this feature has never been set up before, QuickBooks will open a window asking the user to set the parameters for the first payroll tax type. In this QuickBooks sample file, that tax is Federal 940.

Set the payee and the payment frequency. The next window will likely be the payment schedule for Federal 941/944/943.

QuickBooks Training 091713 image 3

  Setting up payment parameters for Federal 941 payments

This screenshot displays a clearer picture of the windows in which the parameters are being set. The payee can be selected from the Vendor list (accessed via the down arrow where Payee is specified, indicating that a drop-down list will be available for this field).

There is also a drop-down selection list for the Payment frequency. This list includes:

  • After Each Payroll (Semiweekly)
  • Monthly
  • Quarterly
  • Annually

Choose the appropriate selection for your company.

The setup wizard will present you with another similar window for each payroll tax payment you are required to pay. Set the parameters for each.

The payroll taxes for your state may be different than the screenshots here, but the process is the same.

If you are looking for even more QuickBooks payroll instruction, you might try a QuickBooks video. Payroll is an element of QuickBooks that needs to be thoroughly understood before it’s used.

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