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Scheduling the Payment of Payroll Liabilities

A few years ago, QuickBooks introduced a new feature to schedule payroll liabilities. QuickBooks ‘newbies’ and veterans alike are often slow to utilize this capability.

The ‘old’ method of paying liabilities is now labeled Create Custom Liability Payments and is found at the Employees | Payroll Taxes and Liabilities menu. The resulting window for creating the payment looks like this:

1 Custom Liability Payments

Using this window, the QuickBooks user must select five payroll tax items in order to complete a 941 payment. Many find it difficult to remember which items to select, consequently select one or more incorrect items, and that creates discrepancies between what QuickBooks thinks has been paid and what the IRS has recorded as being paid. It all has to be straightened out.

There is a better way. The initial setup requires sufficient knowledge about the company’s payroll to setup the deposit frequencies, but after that, the process becomes very automatic.

Find the menu link that allows the setup of payment due dates and methods. The screenshot at left is from QuickBooks 2013. In QuickBooks 2014 the link will read “Change Payroll Method.” Or, navigate to Employees | Payroll Taxes & Liabilities | Edit Payment Due Dates & Methods.


However you begin the process, QuickBooks will initiate the Payroll Setup program. It will only give you the options for setting up payroll liability payments.

At first, you will see an explanation window. Clicking Continue, will advance the program to a screen that appears something like this:

3 Schedule Payments

The sample file is a California employer and there are only four tax types to setup. The window to setup the federal 941 looks like the one below:

4 Setup 941 Payment

As you can see from the graphic, we must add a vendor, often U S Treasury if you are making electronic payments, and a frequency. This company deposits monthly. Another common frequency is After Each Payroll.

Once all four tax types are complete, the new Payroll Center appears like this:

5 Schedule Liability Payments

Now each 941 payment, for example, will be on one row and only require one click to select it for payment. No multiple items to check.

The table keeps the QuickBooks user apprised of the due date for each payment, as well as the pay period it covers.

The colored flags, red for overdue and orange for notification, due now, are a QuickBooks 2014 enhancement.

This process is simple to initiate, easy to complete, and will make the paying of payroll liabilities much easier.




Hector Garcia CPA and QuickBooks/Excel Trainer

Hector Garcia CPA and QuickBooks/Excel Trainer

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