As you do payroll or collect tax from your customers, the tax accumulates in the associated liability accounts. When the tax is paid, the liability account is reduced.
To pay taxes, go to Pay Tax from either the Vendor or Banking menu.
Select Tax Vendor to Pay should be the vendor entered when the tax was set up, and that you make the tax payment to. For payroll taxes, the vendor can be found in Employees → Payroll Tax Items, select the desired tax and then Modify. Sales Tax vendors can be found in Sales → Enter Tax Codes.
Select the Type of tax you want to pay from the drop-down. Note that "Federal Tax Deposit" includes Federal Withholding, Employer and Employee FICA, Employer and Employee Medicare and any additional Medicare.
Choose the last date of the period you are paying taxes for in the Pay Tax Through field. For example, if you are paying sales tax for February 2013 you would choose 2/28/2013. Click Begin and the next screen appears showing all unpaid taxes for that vendor, of that type, through the selected date.
Select the Account you will be paying the taxes from, this is usually a checking account or credit card account. Whan an account is entered, the current balance in that account is shown in the Balance field to the right. By default, all items are selected to pay and the total of those items appear in the Selected field. The Ending balance shows what the checking balance will be after all of the selected items are paid.
In the Date field, enter the date you want on the payment.
If you are allowed a discount enter the amount in the Discount Taken field as positive number. Entering a negative number will add to the amount of the check. The amount here will be applied to the account chosen for Payables Discounts in Company → System Setup → System Accounts.
Next, choose the desired check Status:
- To be printed – This will send the check to the print queue where you can print the check whenever you’d like from Banking → Print Checks. Note that the journal entry for these checks will not be recorded until the checks are printed.
- Print checks now – As soon as you click Save, the Print Checks screen will open and you will see all your checks that are waiting to be printed.
- Mark as already printed – When you click Save and have this status selected you will be asked for the starting check number. After the transaction is saved it will be in the Account Register as a completed check. If you chose Mark as already printed as the check status, you'll need to select a Starting Number.
The amounts that appear on the Pay Tax screen can also be seen on the following reports:
- Sales Tax – Sales Tax Report
- Federal Tax Deposit – Payroll Tax Liability Report, Payroll Report
- State Income Tax – Payroll Tax Liability Report
- Local Income Tax – Payroll Tax Liability Report
- Secondary Local Tax – Payroll Tax Liability Report
- Other Tax – Payroll Tax Liability Report
- SDI – Payroll Tax Liability Report
- FUTA – Unemployement Tax Report → FUTA, Payroll Tax Liability Report
- SUI – Unemployement Tax Report → Co Paid SUI, Payroll Tax Liability Report