I'm here to make sure you'll be able to deduct tax in QuickBooks, @momfattahi.
There are several reasons why no deductions are calculated in QuickBooks.
- Total annual salary surpasses the salary limit.
- The gross wages of the employee's last payroll are too low.
- Ensure to run the latest payroll update.
When the federal withholding is not deducting accordingly, you’ll have to revisit your employees’ profiles to check if they are set up correctly. QuickBooks calculates the federal withholding based on these factors:
- Taxable wages and number of allowances/dependents
- Pay frequency and filing status
Here's how to review your employees’ payroll information:
- Select the Employees menu.
- Click Employee Center.
- Choose the employee’s name, one at a time.
- Click Payroll Info on the left.
- Ensure that the Pay Frequency is correct.
- Select the Taxes button.
- In the Federal tab, review the Filing Status and Allowances fields. Make the necessary corrections.
- Choose OK.
- Select OK again.
Otherwise, if you add the deduction to your employee’s first payroll of the year, the liabilities will be added to the current year. What you can do is to create an adjustment check dated the same as the last payroll. By doing so, you’ll not have problems with your 2020 tax forms like 941 and W2.
If you have pending paychecks from the Enter Payroll Information window, right-click on the paycheck, then choose Revert Paycheck to undo the changes. Once completed, re-enter the paycheck details to ensure taxes are calculated correctly.
For additional reference about this action, read this article: How to save or revert pending paychecks.
Here are also some lists of articles you can read more about paychecks calculation in QBDT:
Feel at ease to let me know if you need further assistance in managing some payroll concerns. I'll gladly help you in any way that I can. Keep safe and take care.
