Thanks for clarifying your concern, @AnneB. I'm here to help ensure you're able to reconcile the journal entry to the employer tax return.
Since you're using QuickBooks Online for accounting and use a third-party payroll, you still need to keep track of those paychecks in QuickBooks.
First off, you'll need to create an expense account from your chart of accounts. Ensure to select these type of Expense account:
- Payroll Expenses: Wages
- Payroll Expenses: Taxes
Then, create these liability accounts. These are the Liabilities account type you'll need to choose:
- Payroll Liabilities: Federal Taxes (941/944)
- Payroll Liabilities: Federal Unemployment (940)
- Payroll Liabilities: [State] SUI/ETT
- Payroll Liabilities: [State] PIT/SDI
Once done, follow Step 2: Enter the payroll paychecks into QuickBooks Online outlined in this help article: Manually enter payroll paychecks in QuickBooks Online.
Then, you'll have the option to reconcile them.
For future reference, visit our QBO Help Articles page for more insights about managing your business in your account.
Let me know if you need help about anything else. I'll be here to lend a hand.
