How do I determine what my quarterly payroll tax payment should be?
To find out how much you owe in taxes each quarter, print the the Federal Remittance report and the State Accumulation reports. These reports may be found in Payroll, Reports, Federal, Federal Tax Remittance and State and Local, State Accumulations.
Quarter One Federal Tax Remittance Report Example
Quarter One State Accumulations Report Example
Recording the transaction
In payroll, monies deducted from an employee's check for taxes are credited to the Liability Accounts set up in the Account Distribution for each employee's Gross Pay Account. When you are ready to pay the tax bill, you would debit these same accounts while crediting the cash account. This may be done through a Journal Entry or through the Billing System. If you use a Bill, simply assign an EFT check number to the transaction.
Below is an example of a Gross Pay Account Distributions
Below is an example of the Account Balance Report for the Distribution Account used for MediCare for the first quarter. (In this example, payments were recorded monthly). Compare these totals with the totals on the Federal Tax Remittance Report from Quarter One, and you will see that as Payroll was Processed, the Medicare Liability Account set up in Account Distributions were Credited for Medicare deductions. When the payment was recorded, this account was Debited (reduced) while the Checking Account was Credited (reduced). Each of the other tax payments would work the same way.