Using QuickBooks for Payroll Processing


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In this webinar presentation, learn the step-by-step instructions on using QuickBooks for payroll processing, from entering time to creating paychecks.

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Using QuickBooks for Payroll Processing

  1. 1. Using QuickBooks for Payroll ProcessingObjectivesThis webinar will discuss:• The information needed to begin payroll set-up• Entering Time• Creating paychecks• Paying payroll liabilities• Processing 1099s in QuickBooks 1
  2. 2. Processing 1099s in QuickBooks• Go to Edit, Preferences, Tax: 1099, Company Preferences.• Set-up the appropriate 1099 category for each applicable account.• Each vendor that may need to receive a 1099 must be checked as an eligible vendor under the Additional Info vendor tab.Using the 1099 Wizard• May be found in the Vendor drop-down list under Print/e-file 1099s, or• Under the Tax: 1099 Preference.• QuickBooks can only create Form 1099-Misc and they must be printed on preprinted stock. 2
  3. 3. QuickBooks Payroll• A subscription service that works inside your QuickBooks Accounting Software.• The payroll subscription must be activated to allow payroll processing in QuickBooks.• For an annual fee, QuickBooks • calculates payroll checks and payroll tax liabilities • provides up-to-date payroll tax withholding amounts • tracks time for job costing reports.• There are several payroll service options available. 3
  4. 4. Preferences for Payroll & Employees• Go to Edit, Preferences, Payroll & Employees.• If you wish to track time for Job Costing, or would like to track time and payroll costs by Department, check the appropriate box under Company Preferences.• Time tracking is setup under the Preference Time & Expenses.Payroll Setup• QuickBooks will walk you through setting up the basics of payroll through a series of questions.• You will need compensation and benefit information, employee’s W-4 forms, pay rates, deductions, hire dates, state unemployment contribution rate, and tax id numbers.• If you are starting mid-year, payroll history information is needed. 4
  5. 5. Payroll Items• Work in the background to link the information on the paycheck to the proper expense and liability accounts.• Payroll items include salary, wages, bonuses, deductions, benefits, and taxes. 5
  6. 6. Employee Defaults• An employee’s pay rate, deductions, additions, payroll schedule, and taxes can be entered or edited in the Employee Center.• If you wish to use time data to create paychecks, be sure the box is checked in the employee’s Payroll Info screen.Editing Your Payroll Setup• Payroll information can be edited as needed.• Rates can be adjusted through the payroll item list, rather than going through payroll setup.• Employee information can be edited in the Employee Center.• Payroll Updates should be run regularly • RUN A PAYROLL UPDATE PRIOR TO THE FIRST PAYROLL OF THE NEW YEAR• IL Unemployment Tax Rate should be adjusted on January 2. 6
  7. 7. Entering Time• Time can be entered using the Weekly Timesheet.• Multiple jobs, service items, payroll items, and classes may be used on the same day.• Time can be entered as a single activity.• There are several applications that integrate with QuickBooks and can be used to import time.• Time can be entered directly in the Preview Paycheck screen.Creating Paychecks• Using a payroll schedule, in the Payroll Center go to Start Scheduled Payroll.• If you are not using a payroll schedule, from the Employee drop down list choose Pay Employees, Unscheduled Payroll.• DATES ARE IMPORTANT!• Be sure that the Pay Period Ends date and check date are correct. 7
  8. 8. Using Scheduled Payroll• Select the employees you wish to pay.• Choose Open Paycheck Detail to make any changes.• Review the payroll information.• Create paychecks.• Paychecks and stubs may be printed directly from QuickBooks.• Follow the same steps using Unscheduled Payroll.Paying Payroll Liabilities• If paying Scheduled Liabilities, choose the liability you wish to pay, Click View/Pay.• Save the check, then call in the EFTPS payment, or use e-pay to pay the liability.• If not paying through Scheduled Liabilities, from the Employee drop- down list choose Payroll Taxes & Liabilities, Create Custom Liability Payment. 8
  9. 9. Paying Payroll Liabilities• Choose the date range of 01/01/12 through the pay date. DATES ARE IMPORTANT!• Choose the liabilities to pay.• Always choose “Review liability check…”• Choose Create.• Review, then save and use EFTPS to make the payment.Making Corrections• If payroll liabilities are not paid through the payroll liability screen, they will appear as unpaid in the Payroll Center.• Verify the payment has been made before adjusting the liability.• Check to see to what account the payment was applied.• Pay the liability with a $0 liability check offset to the incorrectly charged account. 9
  10. 10. QuickBooks Employee Center• Employees tab shows transaction history for each employee.• Transactions tab shows all paychecks, liability checks, liability adjustments, and non-payroll transactions involving employees.• Payroll tab shows scheduled payroll related payments and payroll subscription information.QuickBooks Payroll Summary Report• Check for Reasonableness • Report shows actual payroll amounts • Do the employer and company medicare contributions match? • Are the unemployment contributions over the limit? 10
  11. 11. Payroll Tax Returns in QuickBooks• If the payroll setup is wrong, the 941 will be wrong.• Use the payroll summary to check the figures on the 941.• Summarize the Payroll Data in Excel to complete the IL Unemployment Tax Return. • State Wage Listing tab shows excess wages • Verify the IDES rateYear-end Payroll Returns• QuickBooks can be used to create Form 940, W-2s, and W-3.• W-2s can be printed 3 to a page or 4 to a page for employee distribution.• Government copies of W-3 and Copy A of the W-2s can be printed directly from QuickBooks. 11
  12. 12. Questions? Deborah Garrison, CPAAdvanced Certified QuickBooks ProAdvisor Sikich LLP 1415 W. Diehl Road, Suite 400 Naperville, IL 60563 T: 630.566.8470 F: 630.375.6996 12