Payroll Post Notes: Reconcile Your Payroll Taxes Before the End of the Year

Jennifer Maroney — Thu, 11 Dec 2008 15:33:00 GMT

Tax season is never a fun relaxing time whether you are an employer preparing W-2s or an employee filing your taxes. I can't help with filing your individual taxes, but I can help save you a headache or two when preparing your W-2s. My key advice...don't wait until January 26 (the last week in January) to start the process. If you do, good luck with Murphy's Law . Another step you can take is to reconcile your 4th quarter 941 tax report. This can be done before the end of the year and will help ensure smooth W-2 processing in January.

Oh, one quick thing about reconciliation before we get to the good stuff. If you don't reconcile regularly, add this important step to your policies and procedures manual. OK, let's get started.

The first step, of course, is to create a 941 Tax Report. Now that you have the report, refer to the table below to reconcile each line.

941 Line Number	Report Name	Report Options	Reconciliation Process
Line 1	Payroll Register	On the General tab, select to include paid calculations. Select <Specific date> for Payment date and enter the date range used on the 941 report. Mark the Create an output query of checkbox and select Employees.	In Query, open the query created from the Payroll Register. Select the Results tab to view the number of employees.
Line 2	Adjusted Gross Wage Report	On the General tab, select to include paid calculations. Select <Specific date> for Payment date and enter the date range used on the 941 report.	Verify the Federal Withholding (Federal W/H) Grand Total.
Line 3	Payroll Register	On the General tab, select to include paid calculations. Select <Specific date> for Payment date and enter the date range used on the 941 report. Under Include calculation detail for, unmark all checkboxes except Taxes. In the Print a field, select Summary. Mark the Summarize activity by: checkbox and select Pay stub ID. On the Filters tab, select to filter Taxes by Federal tax.	Verify the Federal amount under Total Deductions/Employee Taxes.
Line 5a	Adjusted Gross Wage Report	On the General tab, select to include paid calculations. Select <Specific date> for Payment date and enter the date range used on the 941 report.	Verify the Social Security (Soc. Sec.) Grand Total.
Line 5c	Adjusted Gross Wage Report	On the General tab, select to include paid calculations. Select <Specific date> for Payment date and enter the date range used on the 941 report.	Verify the Medicare Grand Total.
Line 8	Payroll Register	On the General tab, select to include paid calculations. Select <Specific date> for Payment date and enter the date range used on the 941 report. Under Include calculation detail for, unmark all checkboxes except Taxes. In the Print a field, select Summary. Mark the Summarize activity by: checkbox and select Pay stub ID.	Using the amounts under Total Deductions/Employee Taxes, calculate: Federal W/H column + [(Soc Sec + Medicare columns) * 2].
Line 9	Payroll Register	On the General tab, select to include paid calculations. Select <Specific date> for Payment date and enter the date range used on the 941 report. Under Include calculation detail for, unmark all checkboxes except Taxes. In the Print a field, select Summary. Mark the Summarize activity by: checkbox and select Pay stub ID. On the Filters tab, select to filter Taxes by Advanced EIC.	Verify the Advanced EIC amount under Total Deductions/Employee Taxes.

Want more Payroll end-of-year information? Take a look at the Payroll Post special edition: Payroll 7 End-of-Year Process. Talk to you soon!

The Ledger : 941 report

Payroll Post Notes: Reconcile Your Payroll Taxes Before the End of the Year