Even the most reliable and efficient software can sometimes cause a problem or two. The QuickBooks desktop is no different in this regard, and today we’ll calculate pay QuickBooks payrolls that don’t count taxes, which has bothered a lot of users to date. But before that, it is important to understand where QB incorrectly calculates payroll taxes.
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The main inaccuracy usually occurs during percentage (%) based tax calculation in the following tax items:
- FUTA (Federal Unemployment)
- SUI (State Unemployment Insurance)
- SDI (State Disability Insurance)
- Social Security
These mistakes are often spotted when the tax amount for a particular tax item displays incorrect values. For instance, it would show an under/over-collected amount or $0.00. In some cases, the entire tax item is absent altogether, whereas other instances indicate that the tax amount even surpasses the annual limit of tax that can be collected.
Read on to learn how you can find out the source of the ‘QuickBooks payroll not calculating taxes’ problem and the necessary steps to resolve the same.
QuickBooks Payroll Not Calculating Taxes – Possible Causes
The most probable cause for getting incorrect tax values is that the initial data derived was inaccurate. This data is derived from the employee information which you or the user enters in QB Desktop.
So, make sure that all the data which you are setting up regarding your employees or payroll items are checked and up to date. You can do this by running regular payroll reports prior to filing taxes.
CASE 1 – Mistake in Just One Paycheck
You only have one paycheck with the QuickBooks payroll not calculating taxes error:
Having different amounts on the same paycheck may not necessarily mean your software is malfunctioning. Generally, the fault does not lie with QB at all but it could be –
- the outdated values in the tax table which the software uses to make these calculations.
- A change in the filing status
- Extra paychecks being created aside from the general pay calendar
- A difference in the wage amount for the paycheck being created
Fix: Perform the following tasks in the same order as they are mentioned below –
- Update the tax table first.
- If the paycheck has not been fully created yet then revert it.
- In case you have created the paycheck but not sent it to the employee, delete it.
- If you have issued the check then void and recreate the same. You can make adjustments to the net amount difference in the following month/week.
CASE 2 – Wrong Employee-Related Data
Employee-related data like YTD (year to date) or qt (quarter to date) values are wrong, resulting in QuickBooks payroll not calculating taxes
Fix: The following are the steps to check and rectify the tax values that are set up in the employee profile in an Employee Withholding Report. Follow them and ensure your QuickBooks calculate payroll taxes correctly –
- Go to the Reports menu and select Employee Withholding under the Employees and Payroll section.
- Select ‘Customize Report’ and click on the desired columns to be displayed before moving to the Display section.
- Click one or more payroll items based on your requirements. The provided items are SUI, SDI, FUTA, Employee, State Worked, Social Security, Local Tax, State Lived, and Medicare.
- Once the report opens, you can verify all the values for these payroll items. In case you need to make edits, simply double-click the particular employee for whom you wish to do so.
- Go to the tab that says Payroll Info.
- Select Taxes, followed by one or more tabs for Federal, State taxes, etc.
- If you find an incorrect value then you can edit it here.
CASE 3 – Unknown Cause of Amount Mismatch
Employee-related data and payroll items are entered accurately and the cause of the amount mismatch is unknown.
Fix: Examine the payroll data carefully so that you can pinpoint the exact source of the problem. You can do this with the help of anyone of two tools –
- The Payroll Detail Review Report will help locate the exact cause of the change in values. With its help, you can see every YTD, paycheck, and liability adjustment entered in the software.
- Payroll Checkup – If you want a diagnostic tool that helps you review all the employee records and suggests solutions according to various QuickBooks Payroll Problems that you have encountered, this is it.
- Once you find all the discrepancies, follow these steps to fix qtds and ytds for employees using these steps:-
- If you made use of the Payroll Detail view Report to single out the errors, simply filter the names of the affected employees.
- Void those transactions which have only one wrong value, for example, either a liability adjustment or a paycheck discrepancy and then proceed to recreate them correctly.
- Once you are done, print the report to keep for reference so that you know which employee’s details need adjustments.
- In case you used the Payroll Checkup tool mentioned above, print the report that lists all the payroll discrepancies for reference purposes.
- For every incorrect tax item, add a liability adjustment manually. This needs to be done no matter which tool you have used.
- If the QuickBooks payroll not calculating taxes issue exists even after following all the steps mentioned above, please check whether your company file is intact. You can run the Verify Data procedure that will uncover any data damage, followed by the Rebuild Data process to make corrections if required.
In this blog, I tell you how to Fixing the ‘Quickbooks Payroll Not Calculating Taxes’ Problem
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