Quickbooks federal tax withholding
If the person who was originally assigned the work reassigns the given contract to a third party then now he becomes responsible to pay their taxes (payroll). This would mean that the employer will no longer take care of their taxes as now they will be borne by the one who is reassigned. But the entire scenario may change if the IRS notifies that the employer will have to withhold the amount of the tax paid by the subcontractor. If this becomes the case then quickbooks can become really really handy for you. Here you would just need to enter the backup amount and everything else will then be taken care off. Here is how you can move forward.
- Login to your quickbooks accounts and navigate to the Chart of accounts section from the lists menu.
- Now click on the Accounts tab > New tab > Add new account.
- Click on the tab called Other Account types > other current liability > Now click on continue.
- In the name section of the displayed window enter “Backup withholding taxes”.
- Click save. Now this will create a backup withholding section within your quickbooks accounts.
- Now navigate like Edit tab > Preferences tab > Click Tax 1099.
- Goto the preferences tab but this time click “Company preferences” and click on Federal Tax withholding tab.
- Click on the accounts tab and select the field you created earlier with the name “Backup withholding taxes”.
- Now in the section called Non-employee Compensation choose the account which you use to pay off 1099 subcontractors. This you can do from the “Accounts” tab.
- Click “OK” when done and this will save all your changes made.
Now if you want to make an entry for withholding account then follow these simple steps:
- Select the Bank tab from the navigation menu bar and click on the “write your cheques”. This will open up a different window.
- Expenses > click on the accounts tab to select the appropriate account.
- Keyin the Gross pay in the amount section.
- Now from the second accounts tab, click on the down arrow. From the list choose the backup withholding taxes.
- Keyin your withholding amount. This time add it as a negative balance.
- Fill in all the info that follows and click on print your cheque.
Hope you were able to figure out what you were searching for. But still if you want more help then you can directly talk to our quickbooks technical support number at 1800-940-7442. Our quickbooks proadvisors will assist you online and will give you the most suitable solution.