I'm using QB Pro 2003 and DO NOT have a subscription to their payroll service. I do, however, use the payroll feature to create checks. So I've filled out my federal return form 941 and I owe 100.63 (fictional numbers...) except QB says I owe 100.62 - rounding issue. I used the QB feature to fill out the 941 form, despite the fact that I can't actually send that in. And at the end of the interview, it tells me that the two figures do not equal and gives me the option to adjust, which I do by one penny. Now the interview is balanced, I save it and to "Pay payroll liabilities". From the window I select all of the federal items and guess how much QB says I owe? You guessed it...$100.62! What gives? What happened to that adjustment I put in during the interview?
First, I am trying to figure out how you can process payroll checks and tax liabilities without a payroll subscription..On my laptop without the PR subscription enabled I don't even have that tab available. Are you using a sample file that has payroll enabled?
If you did an adjustment then go back and make sure the adjustment has an effective date of 6/30/08. By default the effective date will be the date the adjustment was made which means that it could be in an different quarter.
The payroll form and tax payments are run separately. Do the payment first and the 941 will pick it up as a deposit already paid. It should pick up that 0.01 difference on line 7's adjustment line for "fractions of cents". It should not have prompted you to do an adjustment so I am not sure what payroll functions you are working with since you said you do not have a subscription service.
It probably would be, except from my understanding, I'd have to upgrade to Pro 2008 ($199) AND purchase their payroll service for another $199! So basically paying $400 just to do payroll on one employee since my current version of QB is perfectly adequate for every thing else I do.
Suit yourself, but there is a reason QB sunsets previous versions every 3rd year and drops support on them. Secondly, QB basic payroll subscription is now $239(US) and not $199 per year. That is a cost of $60 per quarter and that my friend, ain't much for full payroll current updates and support. I am not at all familiar with the UK version for payroll, so commenting further is useless.
You will have this issue regardless of version of QB so I don't think upgrading to QB2008 would resolve this particular issue. I do manual payroll with QB Pro 2004 and here is the way I handle the fraction of cents difference: While processing the quarterly 941 you will com to a screen called "Summary for line 6 to 10". Click "yes" for need to adjust. Click "next" to the "line 9" screen. Insert the Fraction of cents adjustment. In your example this would be -0.01 or 0.01 whichever is needed to come out right.
I process the 941 in QB to the point where it tells me that the figures do not equal as you have mentioned. I make no changes but just click "previous" until I get back to the "Summary for line 6 to
10" screen and make the adjustment there.
By the way, since I get no support or payroll updates on my version I use this just to get the correct amounts and use this info to fill out the current 941 form manually. Hope this helps. Irv
Well, it sort of helps except that IRS form 941 was considerably different in '03 as opposed to '04 and thus QB's handling was quite different, so...I have upgraded to QB Pro 2008 without the payroll service and they have made the situation worse. They no longer let you create, manually, the 941 form. So I revert back to my original problem...
QB tallies up my payroll liabilities according to what I entered on the paychecks and come up with the figure $100.62 but because of rounding, the IRS is expecting 100.63. I guess the easiest option would be to simply make an adjustment. I click the option to "Pay Liabilities" and select the federal items which comes up .01 short. I cannot change any of these numbers because they are what I actually held back from the paychecks so I hit the "Create" button at which point the check appears. I have the option to adjust the check amount here but my question is, how? Should I enter an expense of .01 and put payroll liabilities for the account?
************ That's really a bummer that you can no longer create the
941 manually! ********************** Study up a little and you will find that it is easy to get the info from QB ************************ to manually do your 941 form.************
Sorry, that was a faux pas. I was referring to the fact that you could do the little QB interview and they would fill out the form for you. But anyway...
************ I suggest that you forget about ANY adjustments except the "fractions of cents" adjustment. You can see this on the 941 instructions from the IRS online. You will see this on your current blank form. The IRS allows you to enter the correction to make the amount owed match the QB amounts from the paychecks, therefore the numbers in QB do not need to be changed. It is only intended to adjust rounding differences. You are correct that the amounts of payroll withholding must not be changed in QB.
This "fractions of cents" adjustment was what I am/was referring to. I suppose that I did not fully understand what the IRS form was doing with that line on the form. My gut reaction was that they were making it more difficult, when in fact, they were helping to make it easier to used computerized accounting systems. This line allows me to adjust what I pay to the IRS to match my accounting records, rather than the other way around. You can surely understand why I was confused!
************ We do payroll checks manually for 6 people in a non- profit business and it is really no problem that I would pay for and still have to keep up with the local tax tables that are not included in the payroll subscription.
Hope this is somewhat helpful but I'm only familiar with QB Pro 2004.
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.