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Old 12-20-2005, 12:27 PM
cyndimei cyndimei is offline
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Join Date: Aug 2005
Location: Washington State
Posts: 78
QB Payroll - Bonus checks & taxes

Premier Contractor 2005

Does anyone know how to deal with bonus checks using QB payroll? I have Enhanced Payroll Plus.

I would like to cut a check to an employee for $2000, and not take any employee taxes out of it.

I went into "pay employees," selected the employee, clicked "create" and then started to make changes. I deleted the salary line that pops up automatically. In its place, I used the payroll item "bonus (one time cash award)" and put the dollar amount in.

When I went to the employee deductions section to delete the federal tax withholdings, medicare and social security tax, it came up with a window saying that I've changed the amount and it will affect the totals the next time I do payroll.

I want to avoid that. I spoke to a payroll specialist in Washington State and he said that employees can take the full amount of the bonus check now, and it will show up on their w-2 as additional income -- then they will be responsible for the tax on it when they do their taxes next year.

That's great -- but if I make those changes in QB, I don't want it to screw up my next payroll run.

Basically, I want to still pay the company taxes on the bonus, not have the employee taxes come out of the check, and have that NOT screw up my next payroll run.

Can anyone tell me if I'm doing something wrong or what I need to do differently? Thank you!
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Old 12-20-2005, 02:25 PM
Joey Joey is offline
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Join Date: Jan 2002
Location: South Florida
Posts: 6,258
What he's talking about is to give them the bonus check now and then a 1099 at the end of the year for the amount.
Or, you can go to Pay Employees and check the little box at the bottom of the screen that says Enter Net/Calculate Gross and it will gross up the check for the taxes and include it in the W-2 form.
Certified Pro Advisor
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Old 12-20-2005, 04:49 PM
cyndimei cyndimei is offline
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Join Date: Aug 2005
Location: Washington State
Posts: 78
I just got off the phone with our accountant and he essentially informed me that the payroll specialist is smoking crack. He said that if we're paying bonus checks, there is no way around withholding the taxes -- specifically the Social Security and Medicare taxes.

Not a QuickBooks issue, but a federal law thing.
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Old 12-20-2005, 10:22 PM
coliver coliver is offline
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Join Date: Jun 2002
Location: San Antonio, TX
Posts: 159
I have heard that. Most payroll specialist are on Crack.
Cliff C Oliver CPA
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