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How do I adjust a liability in QuickBooks?

The amount that QuickBooks calculated differs from the amount that you submitted to the agency. To reconcile the difference in your company file, you may want to make a liability adjustment in QuickBooks.

To do this task

  1. Close the Next Steps window.

  2. Go to the Employees menu, choose Payroll Taxes and Liabilities, and then click Adjust Payroll Liabilities. Shortcut

  3. In the Date field, enter the date for which you are making the adjustment. More...

    QuickBooks prefills today's date, but you should enter the date that you want the adjustment to be effective. Otherwise, this item will not show up in the appropriate Payroll Summary Report.
  4. In the Effective Date field, enter the date that you want this adjustment to affect your liability balance. How QuickBooks uses this date

    QuickBooks uses this date to calculate amounts on your Forms 940 and 941 and on the payroll liability balances report.
  5. Choose whether to associate this liability adjustment with the company or a specific employee. Example

    For example, if you overaccrued federal unemployment tax (FUTA) for an employee, click the Employee option and choose that employee's name from the drop-down list.
  6. In the Item Name field, choose the payroll item.

  7. In the Amount field, enter the amount of the adjustment.

    • To increase the amount owed, enter a positive number in the Amount field. If you chose to associate this adjustment with an employee, QuickBooks displays a message that you should create a paycheck instead.

    • To decrease the amount owed, enter a negative number in the Amount field.

  8. (Optional) In the Memo field, enter a note to yourself about the adjustment.

    The note will appear on any detail payroll reports that include this transaction.

  9. Click Accounts Affected to check or modify the setting, and click OK.

    Should you affect your accounts?

    Do not affect your account balances if you have done either of the following:

    • Previously used a general journal entry to adjust your liability for one or more payroll items

    • Paid your payroll liabilities with the Write Checks window

    In the Affect Accounts window, click "Do not affect accounts," and click OK.

    Affect your account balances if you are doing either of the following:

    • Adjusting your liability because of rounding differences

    • Entering a credit or expense for your payroll liabilities

    In the Affect Accounts window, click "Affect liability and expense accounts" and click OK.

    If you adjusted an amount withheld from paychecks, enter the name of the expense account (such as Payroll Expenses) to offset the change in the liability account and click OK.

  10. If you need to adjust an employee's wage base, click the Show Wage Bases button.

    QuickBooks adds a Wage Base column to the window. You rarely need to change an employee's wage base. Even if you overrode a tax amount on a paycheck, the employee's wage base is probably correct.

  11. When you've finished adjusting the liability, click OK.

10/27/2016 5:34:42 PM
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