On the most recent payroll for this week, federal taxes do not seem to have calculated correctly. Higher paid employees have a tiny bit deducted, and lower paid employees have nothing deducted. I had all payroll updates installed, what could have caused this?
Hi there, Sunburst,
I can help check why the federal taxes are deducted incorrectly. I want to ensure correct taxes are calculated so accurate amounts are paid and filed to the IRS.
It's great that you've already installed the latest payroll updates. That knocks one step off of what we need to try next.
If it's the federal withholding that's not deducting correctly, you'll need to confirm the employees' profiles are set up correctly. QuickBooks calculates the federal withholding based on these factors:
Please follow the steps below to check the employees' profiles:
1. Click the Employees menu.
2. Select Employee Center.
3. Double-click the employee’s name, one at a time.
4. Click Payroll Info on the left.
5. Please make sure the Pay Frequency is correct.
6. Click the Taxes button.
7. In the Federal tab, review the Filing Status and Allowances fields. Make the necessary corrections.
8. Click OK.
9. Click OK again.
You can also try manually calculating one of the employee's paychecks to see if it matches QuickBooks. To help figure out the exact withholding amount, please go through the IRS 2018 Publication 15.
You can use the Percentage Method (page 44-45). It's the same method used by QuickBooks to calculate federal withholding.
If you need further assistance calculating federal withholding, you can contact me directly. I'll be here to help in any way I can.
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