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Reconciling Payroll Liabilites incurred in Q4 of 2016 in Q1 2017

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  • Reconciling Payroll Liabilites incurred in Q4 of 2016 in Q1 2017

    I use QB Pro 2015 on an accrual basis and I pay myself the same amount every quarter and my payroll taxes and liabilities are the same for each paycheck. If I pay myself in Nov for Q4, my employer tax liabilities are processed in December before the end of the year and I can reconcile my December bank statement. If I wait and pay my Q4 payroll in Dec, the tax payments aren’t deducted from my bank account until Jan 2017, and when I go to reconcile my December 2016 bank statement, the reconciliation report shows a discrepancy equal to the amount of the Q4 tax liabilities and I don’t know how to get the bank statement to reconcile.

  • #2
    Have you tried marking it as an outstanding check?
    Lorin Browning, Ph. D.
    Fellow -- National Tax Practice Institute

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    • #3
      Thanks - I'm not familiar with using outstanding checks. I have a meeting this afternoon with the people who handle our payroll and file our quarterly payroll reports so perhaps she can help me with it.

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      • #4
        That is part of the reconciliation process in QuickBooks.
        Lorin Browning, Ph. D.
        Fellow -- National Tax Practice Institute

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        • #5
          Thanks Loren - I had forgotten to enter the debits for the payroll liabilities incurred in Dec 2016 and paid in Jan 2017. So QB reconciled properly.

          Should these year-end payroll liabilities show up on my 1120-S Schedule L at the beginning or the end of each year?

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          • #6
            The tax return for a given year, say for 2016, reports what happened during 2016. The revenue or income section of the return reports what happened from January 1 through December 31. The balance sheet reports a picture of your company's status as of December 31 as 11:59.59 pm.

            What shows up on your tax return depends upon whether the return is prepared on the cash basic or on the accrual basis. You need to discuss which basis to use with your accountant or tax return preparer. When you go to print most reports in QuickBooks you have the option or printing on a cash basis or on an accrual basis.
            Last edited by Lorin Browning; 03-09-2017, 05:39 PM.
            Lorin Browning, Ph. D.
            Fellow -- National Tax Practice Institute

            Comment

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