How to Safely Adjust Payroll Liabilities in QuickBooks
Want to make some changes to Year-to-Date (YTD) and Quarter-to-Date (QTD) payroll data such as Company contributions or employee additions but don’t know how to do it? Well, no need to worry. With this post, we’re going to provide you with all the information that you need to know to adjust payroll liabilities in QuickBooks Desktop.
For immediate support adjusting payroll liabilities in QuickBooks, you can contact us at our customer care number 844-932-1139 to get-in-touch with QuickBooks professionals
Users generally adjust payroll liabilities in QuickBooks in the following situations:
- When a user has set up a Health Insurance Company Contribution with the incorrect tracking type.
- To make a correction to the employee’s YTD wages, contribution, deductions, or additions who is not getting paychecks anymore.
- When the amount for company contribution items like 401(k) Company match needs to be changed.
Below we’ve mentioned the entire procedure in a step-wise manner on how you can adjust payroll liabilities in QuickBooks Desktop:
Step 1) Use the Payroll Checkup tool to find discrepancies in your payroll data
- Open your QuickBooks Desktop and go to the Employee menu.
- Now, select the My Payroll Service option from the Employee drop-down menu and then click on Run Payroll Checkup to run it.
- Once the Payroll Checkup tool is done scanning the payroll data, select the Reports tab and then choose the Employee and Payroll option.
- Now, click on Payroll Summary to run a Payroll Summary Report for the quarter you need to adjust.
- Make a note of the amount on the specific Payroll item that you want to adjust.
Step 2) Make adjustments to your payroll liabilities
- In your QuickBooks Desktop, click on the Employees menu and choose the Payroll Taxes and Liabilities option from the drop-down menu.
- Now, you need to select the Adjust Payroll Liabilities option.
Important: You can take the help of the below-mentioned tips to complete the fields
- In case you’re making adjustments to the payroll amount of the going-on quarters, then fill today’s date in the Date field. Otherwise, enter the same date as it is in the last paycheck of the affected year.
- To calculate amounts on your Payroll Liability Balance Report as well as the 940 and 941 forms, the Effective Date is used.
- Now, make the Company Adjustment and Employee Adjustment individually.
Note: You should opt for Company Adjustment in case you want to remove the balance in the Payroll Liability report. Otherwise, if you want to adjust the company paid item then select Employee Adjustment which will update the employee’s YTD information of the W-2 forms.
- You need to select the employee for which you’re making adjustments.
- Enter the required information to fill the Taxes and Liabilities fields.
Important: You can take the help of the below-mentioned steps to fill the Taxes and Liabilities fields.
- Item Name – Select the item that you want to adjust.
- Amount – Use a positive number to increase the amount and a negative number to decrease the amount.
- Wage Base – Use this in case you want to override a tax payment amount on a paycheck.
- Income Tax Subject to – Use this feature in case you’re making a wage base payment.
- Memo – Write down a note of the adjustment that you’ve made for future reference.
- After following the aforementioned steps, you need to select the Account Affected option and hit the OK button.
- For the liability and expense accounts, you need to choose the Do not Affect accounts option to keep balances unchanged. This adjustment will only make a change to the YTD amount on your payroll updates.
- Select the Affect liability and Expense account in case you’re willing to enter any adjustment transaction in the liability and expense accounts.
- Repeat the above-mentioned steps for other employees if it’s required and select OK.
Hopefully, after following the aforementioned steps, you will able to adjust payroll liabilities in QuickBooks Desktop. For additional assistance, dial our toll-free number 844-932-1139 and get-in-touch with QuickBooks professionals.