Quickbooks 2019 Tutorial for Beginners - How to Make a Payroll Liability Adjustment

QBUniversity.org - In this Quickbooks 2019 tutorial for beginners I walk through how to make a payroll liability adjustment.
When you run payroll through Quickbooks, sometimes your payroll liabilities (the amounts you owe to the various government agencies) can get out of whack. To keep your books straight, you need to adjust these liabilities to make sure you are paying the correct amounts. This video walks through how to make these adjustments quickly and easily.
Discover the top 3 errors Quickbooks users make and how to avoid them at QBUniversity.org

[@shingadere]

What is "the rare situation" that one would "Not affect liability Accounts? I thought it was when you have already made the payment, being a liability check and/or employee payroll check, but obviously the option is there for a reason?

[@MCCBookkeeper]

where is the video on correcting employee liabilities?

[@user-mf9dv5qe9k]

Shouldn't quick books have the correct amount in payroll liabilities? I've really struggled with this as none of the liabilities seem correct in my system.

[@QbuniversityOrg]

If you use a QuickBooks payroll service then yes it should if you have mapped it correctly

[@terridupriest2955]

How to make adjustments to payroll liabilities already paid?

[@Desertlife293]

I have a question on Medicare & SS adjustment, which would be for both Company and employee. I use the 6.20% for SS and 1.45% for medicare, however when I do the 941 Quarterly, these change because of the multiplier. So now I have do adjust a small amount .05 on SS and .06 on the medicare. Please tell me how.. Why does the multiplier change when do the form 941, when I am using the correct percentage at payroll time.

[@QbuniversityOrg]

When you say the “multiplier” what are you referring to? It’s common to be off just a bit. You can either do a liability adjustment in QB or you can make a rounding adjustment on the form 941 itself

[@marilynlindstrom5626]

I then need to choose a category to post to. I think I will choose one I never use and see what happens.

[@QbuniversityOrg]

Alright!

[@dsbrown5098]

I just found you and I am so excited!! Thank you for providing all of your knowledge about Quickbooks. I am using Quickbooks Pro 2021 Desktop. I work at a church and have used this program for the last 15 years. All of our previous pastors have been tax exempt from SS & Medicare taxes. I assumed the current one was as well and have been operating under that assumption since he started his employment in February. I found out about two weeks ago that he didn't opt out of SS or Medicare so I am trying to "fix" it. I adjusted the amount in the SS Employee & Company and Med. Employee & Company and have input the income amount subject to taxes but didn't know what to put in the Wage Base column so I left it 0.00. I ran pay liabilities and also the current quarterly report but the amounts that Quickbooks figured for the check and for the quarterly report don't match. Is there something that need to go in the Wage Base column that will make them match? Thank so much for your expertise.

[@gabyperez1762]

Hello, God morning. Thank yiu fir sharing your videos. Every time a have a question a come to see your videos. I have a question, what about if I use another software to do payroll, and want to enter payroll total wages and total liabilities paid here to quickbooks software. How do I enter all these data. I hope you can help me, I'm really lost on it. My Balance Sheet shows a negativo amount fir liabilities, i know im doing somethinh weon. Thanks a los.

[@QbuniversityOrg]

I believe I have a video on that on my channel. In general you have to do a journal entry to record it

[@lisaresney8704]

I have a credit with the Indiana Dept. of workforce development (unemployment) because we overpaid for months. would doing a payroll liability adjustment be the best route to go for reconciling my register? right now it my register shows a check that has never been cashed. I can't delete it becuase then it says i still owe the tax. But i don't because i paid with the credit. make sense?

[@QbuniversityOrg]

Yep I would do a liability adjustment

[@user-nl2vd7wu6s]

This was a great tutorial. How would I adjust a liability that was already paid. For example my liability report said I owed $2045 but my liability balance under the pay liabilities tab said I owed $2044, I did what I now know I should and just changed the liability check by $1. Now it says I still owe the $1. I tried this method but it didn't seem to change anything.

[@nancyemory6835]

Hi, our company has always entered in QuickBooks a Write Check to impute Payments Made Online to EFTPS and EDD. For last 6 years BOTH Fed and State was listed under COA Liabilities acct. 2201 when writing checks. For 2023 accountant wants for us to use COA 232 for the State Payments but I get a warning to pay through the Payroll Liabilities Tab. What COA could I use for State that will balance our books? We do not use the Payroll Liabilities Tab. Thank you for your help.

[@QbuniversityOrg]

I don’t know your chart of account numbers but if you don’t use the Pay Liability function I don’t see why you can’t use 232

[@nancyemory6835]

We do have Enhanced Payroll. Accountant set up so all the Liabilities were paid with a Write Check so as to reduce the dollar amount from our internal Payroll Bank account (Currently using JUST COA 2201- Payroll Liabilities) for Both Federal and State. Federal dollars balances out. Produced a report for COA 232 does not reduce because we don't use when writing check as the Expense Account. I did a sample Write Check for State and tried to 232 in Expense Account but got a warning that if i wanted to use That number I had to pay Liabilities Through QuickBooks. I just want to reduce my COA 232 and have my books balance. Thank you so very much for your time and expertise. Trying to process correctly as Accountant has been doing a General Journal every year since 2017 for this issue. @@QbuniversityOrg

[@QbuniversityOrg]

What if you go to Pay Liabilities and do it there. When you do that it’ll create a check in QB

[@shinybubbles5644]

Hi Matt, I'm so glad to find your video as this is exactly what I'm looking for. I filed the year end payroll tax and received a letter from tax agency that one of the employee had a deficiency amount plus company counter part. I immediately paid online banking but now I have to enter this in QB. Your example is adjusting an existing payroll liabilities but my issue is I already paid it online and now there's no existing amount in QB for this as this has been filed and pay in QB by the year end payroll tax. How do I enter using adjust payroll liabilities? The amount is $30, $15 for employee and $15 for employer part. I hope to enter this correctly in Quickbooks. Thank you for reading my message.

[@QbuniversityOrg]

In all honesty that amount is so immaterial I wouldn’t be overly concerned. You could put it to Payroll Tax Expense and be fine. But in reality, it is actually an expense because even though $15 is the employee portion, it was never withheld, so now you have to cover it, so expensing it would be appropriate.

[@shinybubbles5644]

@@QbuniversityOrg Thank you so much for your reply. Honestly, you are the most down to earth person I ever found and watched over KZbin videos. They way you teached step by step on your video tutorials, very calm, very honest, and the fact the you responded to questions is amazing and unbelievably a very real concerned person. I am so glad I found your videos after searching and watching many videos from different people. Thanks again and I really appreciate your response :) I hope I can find a Canadian version of you :) as I need to learn more about payroll.

[@QbuniversityOrg]

@@shinybubbles5644 thank you so much for your kind words! You’re very welcome!

[@larisaslezak4796]

I have a question. Where you paid the 940 tax I noticed that when you open the liability payment (that looks like a check) there are 2 tabs in the bottom section. The defaulted tab shows the payroll liabilities (tab title) but the grayed out tab just to the left shows "Expenses". My tax liability is off by 1 penny. Can just put the 1 penny on the expense tab and code to payroll tax expense. I would leave my liability as defaulted be the minor difference of 1 cent could be expensed at the same time. Is this another way to fix this situation instead of the "Adjust Payroll Liabilities" method your showed?

[@QbuniversityOrg]

Yeah you could do this. It's such an immaterial amount you know.

[@terridupriest2955]

The EDD sent a letter indicating they've adjusted my first quarter P/R Liability taxes already paid. How do I make the corrections in QuickBooks?

[@QbuniversityOrg]

Are they sending a refund or making you pay more?

[@terridupriest2955]

@@QbuniversityOrg neither. The adjustments to UI, ETT, and PIT resulted to zero balance due but changed amounts paid.

[@QbuniversityOrg]

@@terridupriest2955 changed amounts paid between those three categories? If so, then I would just do a journal entry to allocate appropriately between the 3 categories

[@Zenkhatara]

On my QBO it shows we owe liability of 2,802. 65. We send check and it was returned back to us stating that we don’t owe anything as of that time however the amount still shows up on QUickBooks. What should I do at this point? Thank you so much in advance really appreciate your videos ☺️

[@QbuniversityOrg]

Make a payroll liability adjustment and put it to the Payroll Tax Expense account

[@samthierstein5885]

I followed the video until the question of affecting liability and expense accounts. When I select this and then OK I get a box asking me what account I want it to affect and I lose the process. What I have is a liability withheld from employee checks in anticipation of payment to the state. The state, however, put the program on hold and told employers to return any money withheld to employees. I get lost in the process

[@sandyanderson115]

Is there a way to adjust my FUTA return? The numbers are all off due to changes in Voluntary Life Insurance. The return only allows you to override some items.

[@hxfx6771]

How do you apply a payroll liability payment you made online through the state tax website?

[@QbuniversityOrg]

Do you run payroll through QuickBooks?

[@hxfx6771]

@@QbuniversityOrg Yes.

[@hxfx6771]

@@QbuniversityOrg instead of paying part of the state tax through Quickbooks I paid through the state website. When the transaction came through the bank feed I could only choose the payroll liability account and not the State withholding account. I tried an adjustment but it did not show on my W-2 transmission statement.

[@QbuniversityOrg]

@@hxfx6771 pay it in QB first through Pay Liabilities then Match the bank feed to the payment.

[@haywoodbush3110]

SUI rate was not changed and I went to pay SUI on website. Their calculations were different from mine so I paid what they said I owed. Come to find out my SUI rate wasn't changed from last year. I still show the remaining SUI liability. I just need to get that amount adjusted. Suggestions? thanks

[@QbuniversityOrg]

Under Payroll you an do a Payroll Liability Adjustment to clear it out

[@lilavajd5174]

thanks for the video . I have big problem , I have paid the taxes via eftps for years But I just issued a check from checking account with the check no. i wrote paid via eftps. and I have not used the pay liabilites in quick book ( this was how i was told to do by the previous person doing the quick book. now in my balance sheet for 2020 I notiece a huge amount of payroll liabilities???? I am soooo not to know what to do realy . PLEASE HELP ME.

[@QbuniversityOrg]

When you wrote the checks what account did you put them to?

[@marilynlindstrom5626]

I am using QB 2020 Desktop Pro. I am trying to clear up a debit balance in the payroll liabilities account. We have had no employees with any withholding over the past 2 years (church with only the pastor as an employee). From years past there remains a debit balance which I know for a fact should be 0. How do I clear this? We are not required to file any income tax report nor form 990. I just want the balance sheet to reflect the true liability of 0. Any help would be appreciated. Thank you

[@QbuniversityOrg]

How big is the balance? I would say that if it’s pretty immaterial I would just do a journal entry to credit the account to zero and debit a miscellaneous expense account

[@GraniteBayWomensMinistry]

Hello I watched some of your videos and you seem very knowlegeable. I desperately need help with making some payroll liablity adjustments for a paryroll item that was taxed when it shouldn't have been. I have talked to Intut about this several times and they have no idea how to help and keep having me make an adjustment that then creates another problem. Do you offer consulting for a fee? the 941 is showing we owe about 10K but we do not. :o(

[@Mymusicfmw33]

Hello. Great demo adjusting PR liability. I followed instructions for the State liability owed and worked beautifully. Not so beautiful, I have employee health ins liability. I pay it just like other liabilities, with payee the insurance Co. and QB deducts ant from checking account (I do not send employees portion at this point to insurance co ) Problem is that I then pay the insurance Co the entire premium due which includes employees portion. So now the liability amt say $500, is deducted from checking acct AND the entire insurance premium which is due. So really, my chkg acct balance is incorrect. The liability and premium are both due the 1st of each month. Why isn’t the employees liability showing as a credit to the insurance expense? Is there a fix? Thank you.

[@QbuniversityOrg]

MS Cellaneous the employee portion should show as a reduction to the expense. What I would do is check what account the employee portion is pointing to in the payroll item setup

[@Mymusicfmw33]

The Quickbooks University Than you for reply. I’m almost too embarrassed to say- I had the Payroll item pointing to the payroll liability itself!! The times I went and looked at this payroll item I saw the payee as Anthem Insurance and totally overlooked the account. Now it’s Journal entry time. Thank you again, and sorry for my oversight. This is a constant learning process.

[@QbuniversityOrg]

MS Cellaneous no problem you’re welcome!

[@marilynlindstrom5626]

I recently took over QuickBooks at my church and have come to realize there is a debit amount in the Payroll Liabilities account in excess of $1,000.00 This goes back 20 years ago when the first entries into Payroll Liabilities were bank payments, with no offset withholding amounts. Of course those amounts do not balance with the current debit sitting in Payroll Liabilities. How can I make an adjusting entry to zero out Payroll Liabilities (only 1 current employee with no withholding; pastor)? Thank you

[@QbuniversityOrg]

I would do a journal entry to clear it out. You would have to put it somewhere, like Other Income or Expense

[@marilynlindstrom5626]

I’ve tried. The system will not allow me to post a general journal entry to Payroll Liabilities. Thanks for your opinion.

[@QbuniversityOrg]

@@marilynlindstrom5626 ok then what you can do is go to Adjust Payroll Liabilities in the Employee Center. This should work if payroll is run through QB

[@Beautiful__lives]

hi，Matt：how to make adjustment for the bill paid by wrongly payer

[@lettyletty8456]

Thanks for the video, I work for a company that every pay-roll paid we have to go in and change the payroll liabilities amounts (these don't tabulate correctly). QB gives us the payroll summary and we input from that. Should I still change it as you show in this video? I also have another question, PLEASE HELP can I write a check (NOT PAYROLL) and have taxes deducted without using the payroll option?

[@QbuniversityOrg]

Letty Letty how do they not tabulate correctly? Yes I would still do it this way if you pay payroll through QB to keep the accounts correct. You can write a check and split it between accounts so you show some kind of withholding, but it doesn’t track it for you like the payroll function. What is the context?

[@lettyletty8456]

The Quickbooks University thank you sooo much! So I ran a special income check thru payroll before payroll, because this was requested to be taxed. This messed up the payroll liabilities for all payroll. It only tabulated taxes for the first check (before payroll check). I did what you said to do in this video and it worked! Thank you lots!! I’m new at this company the bookkeeper before me told me to just change the amounts, that’s NOT accurately the right way. Your video explained it very well and it worked. Can I run this check thru payroll under “other payroll income” and these be taxed yet not mess up my payroll liabilities?

[@QbuniversityOrg]

Letty Letty not sure what “other payroll income” is? If you run it through QB payroll it will keep track of your payroll liabilities along with regular payroll. If you want to keep them separate from the main payroll you could just run it on a different date than the main payroll

[@lettyletty8456]

The Quickbooks University thank you again. I will try it on the next pay period :)

[@QbuniversityOrg]

Letty Letty you’re welcome!

[@Mymusicfmw33]

Oh boy! I paid 941 via federal site EFTPS and somehow I also indicated to withdraw amount due via ACH. So now I’ve double paid. To be sure, I need to make 2 Journal entries: company and employee- SS And Medicare for each, along with the Withholding for the employee ? This will reduce the 941 amount due for period ending August 31. Am I thinking correctly? Thank you once again.

[@QbuniversityOrg]

MS Cellaneous that’s a bummer. But yes it should just essentially prepay the August amount due

[@Mymusicfmw33]

The Quickbooks University What a relief! My fingers were working faster than my brain that day. Oh, too,I’ve watched your video on setting up prepays (ie insurance paid over 12 mos). I have that set up !! Do you think I need to set up the prepay for this goof up, so the financial report isn’t skewed?

[@QbuniversityOrg]

MS Cellaneous yep I would

[@Mymusicfmw33]

The Quickbooks University Thank you very much. All done!!

[@QbuniversityOrg]

MS Cellaneous you’re welcome!

[@daisyjeong7661]

How do I reverse payroll and adjust payroll liabilities I've already paid?

[@QbuniversityOrg]

What exactly are you trying to do?

[@daisyjeong7661]

I made a payroll cheque for an employee in QuickBooks and sent the government a cheque for his payroll liabilities such as income tax. Unfortunately, he was not an employee for the company. So, I have to cancel his payroll in QB and adjust the payroll liabilities. How do I do in detail in QB to resolve those problems?

[@QbuniversityOrg]

@@daisyjeong7661 can you just void the paycheck?