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ChiColorLabel
January 14, 2022
Question

Payroll Tax Liabilities as Open Bills

  • January 14, 2022
  • 1 reply
  • 0 views

We recently converted from Sage 50 to Quickbooks.

 

In Sage, we would create recurring payments for our payroll tax liabilities using an placeholder amount (equal to an average amount we pay every month). This would allow us to use those amounts in our cashflow calculations.

 

When we try to create these same liabilities as Bills in QuickBooks, we receive the following message:

 

Problem: It appears you're about to pay your payroll liabilities

Solution: To ensure that your payroll tax forms and reports are calculated correctly in Quickbooks, you should use the Pay Payroll Liabilities feature to create checks for payroll tax payments.

 

We will use the "Pay Payroll Liabilities" feature to pay our payroll taxes every month but I want to also have a way to forecast these amounts and calculate them into our cashflow reporting. I don't believe this is possible without first creating a bill for these amounts.

 

Can someone clarify how we can accomplish this while still working within the payroll tax system to pay our liabilities as the "Solution" above states? If we create a bill for these liabilities and also use the "pay payroll liabilities" feature, would we be duplicating records (a payment recorded using "pay payroll liabilities" and another with the bill I created?

1 reply

C
Charies_M
January 14, 2022

Hello there, ChiColorLabel.

 

I appreciate such detailed information about your concern. Let me go ahead and address them for you. 

 

The warning message you received occurs when you write checks or use the Enter/Pay Bills functionality to pay for the liabilities in QuickBooks Desktop (QBDT). When you select the Pay Payroll Liabilities button, you will be routed to the Select Date Range for Liabilities dialog. The message directs you to the Pay Payroll Liabilities feature to create a payroll liability check.

 

Therefore, there's no need to create a bill. Instead, use the Pay Payroll Liabilities option which can be seen in the message prompt.

 

More information about the different ways and scenarios when paying liabilities can be found in this article: Fix overdue or red scheduled liabilities in QuickBooks Desktop.

 

You can use this article that will serve as a guide to help prepare your tax forms: Year-end checklist for QuickBooks Desktop Payroll.

 

I'm just a post away if you have any additional questions about doing the liability adjustment or anything about QuickBooks. I'm more than willing to help. Have a great day!

C
ChiColorLabelAuthor
January 14, 2022

Charies_M,

 

Thanks very much for replying, however I think you missed the main point of my question.

 

We want to have these payments pre-recorded in QuickBooks so that our cashflow report takes them into account as future liabilities. 

 

Using the method you describe, we will not be recording the payable withholding amounts and saving it in QuickBooks until the moment we actually run the Pay Payroll Liabilities process. 

 

Cashflow reports are meant to look out over 30-60 (or so) days to determine what is incoming and outgoing during that time so using your method, these reports would ignore a huge amount of money that gets paid every month as withholding taxes.

JoesemM
JoesemM
January 14, 2022

Thank you for getting back to us and sharing additional details, @ChiColorLabel.

 

The information shared by my colleague will fix the warning message that you received in creating liabilities. For reporting purposes, you can create a Bill affecting payroll liability as long as you know the exact amounts and dates. 

 

Once you run payroll, this will increase the payroll liability, and you need to manually delete the Bill, so you don't have duplicates or overstate the payroll liability.

 

Before doing the process, I'd suggest consulting your accountant. They can help and provide more expert ways of dealing with this situation. If you're not affiliated with one, our Intuit Find-A-ProAdvisor site can help you to find certified professionals in your area.

 

To delete a bill, here's how:

 

  1. Select the Lists menu, then Chart of Accounts.
  2. Double click the appropriate Accounts Payable account to open its register.
  3. In the Accounts Payable register, select the specific bill or bill payment check.
  4. Select the Edit menu, then Void/Delete Bill/Bill Pmt-Check.
  5. Click Record, then Yes to save the changes.

 

For more details, see this article: Void or delete a bill or bill payment check.

 

In case you want a quick view of your payroll totals, including employee taxes and contributions to see what you've paid out:

 

 

Please know you can continue to reach me here with any additional questions. Thanks for coming to the Community, wishing you continued success, @ChiColorLabel.

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