QuickBooks 2012: The Missing Manual by Bonnie Biafore

Author:Bonnie Biafore [Bonnie Biafore]
Language: eng
Format: epub, pdf
Tags: COMPUTERS / Desktop Applications / General
ISBN: 9781449312558
Publisher: Pogue Press
Published: 2011-10-19T16:00:00+00:00

Unless you run an all-volunteer operation, sooner or later, your employees are going to want to get paid. When that time comes, you face the daunting task of dealing with payroll, which is the name for all the financial records you have to keep for employees’ salaries, wages, bonuses, and deductions. This chapter explains how to pay yourself without payroll, how to record do-it-yourself payroll transactions, and how to record the payroll transactions processed by a payroll-service company.

If you run a one-person shop, like a sole proprietorship, partnership, or a small Subchapter S corporation, you can withdraw money from the company as compensation without fussing over payroll. But to take advantage of retirement savings options like a Simplified Employee Pension (SEP), you have to deal with special rules regarding eligible compensation. For sole proprietors and partners, all you have to do to determine your eligibility for a SEP is calculate your compensation, which is based on company net profits. However, a Subchapter S corporation has to pay you an actual salary for you to be eligible for a SEP plan.

If you’re one of the poor souls who has to deal with payroll, you can process payroll on your own by adding transactions to QuickBooks for your payroll checks and the payroll tax payments you make to federal and state government agencies. (The box on the next page explains what you’re in for if you decide to do payroll on your own.) But you can also outsource the headaches of payroll to a payroll-service company (as many businesses do). If you go that route, then you simply use values from the payroll-service company’s reports to fill out a couple of transactions for each payroll in QuickBooks—to allocate salaries and wages, payroll taxes, and any other payroll expenses to the accounts in your chart of accounts. For companies with small payrolls, outside services are a pretty good deal, since they take care of all the grunt work for the equivalent of the cost of a few hours of your time.

Not surprisingly, Intuit offers payroll services of its own. Its options range from a bare-bones service that provides only updated tax tables to a full-service payroll. However, Intuit’s payroll services require a lot more effort on your part than outside services do, as you’ll learn on Using an Intuit Payroll Service.

DON’T PANIC: Preventing Payroll Migraines

Payroll regulations are painfully complex and vary depending on the size of your payroll and the tax agencies to which you remit payroll taxes. If you’ve just started a new business and are new to payroll, it’s almost impossible to handle payroll on your own. Even if you get it right, you’ll spend hours working on it—time you could spend more productively doing other things, like lining up more business or enjoying hard-earned leisure time.

The easiest way to handle payroll is to hire a payroll service (Recording Transactions from a Payroll Service) to handle the headaches for you. For a few hundred dollars a year, the service will help

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