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Discussion Forum Index --> Accounting Questions --> QB Final Paycheck with Salary Deferral
Chase (talk|edits) said:
| 7 January 2007
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| How do you issue a paycheck in QuickBooks when the entire amount of the paycheck is deferred into a 401k? I put the amount of the check in the earnings section, $2000. Then I put the $2,000 into the 401K deferral section. The net check to the employee comes out as a negative amount because of the FICA and Medicare taxes. If we increase the amount of the final paycheck at year end to compensate for the FICA, then, there are additional withholdings in the form of Federal and State withholdings. I'm definitely no payroll expert in QuickBooks so any help would be appreciated.
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Deback (talk|edits) said:
| January 7, 2007
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| There has to be FICA and Medicare withholding on the gross wages. Either gross up the wages ($2,000 divided by .9235 = $2,165.67) or decrease the 401k deferral by the amount of the SS tax on $2,000.
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Chase (talk|edits) said:
| 7 January 2007
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| That's what I was thinking to do ---- thanks.
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Deback (talk|edits) said:
| January 7, 2007
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| And I wouldn't worry about withholding federal and state taxes, since the taxable wages portion will be small in this case.
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