Accounting, Payroll & Pension Issues/940 issue

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Expert: - 1/12/2012


Question
I am fairly new to Quickbooks and am now running a 940 for year end.  It is showing exemptions on the 940, which we should have none.  My company is a 501c8, but should still pay all federal unemployments amounts.  Could you help me troubleshoot where the exemptions may be coming from?

Answer
Hi Carrie,

The payroll exemption was a field that was in used under certain circumstances during CY2010. The exemption had provided employers with an exemption from the employer’s 6.2% share of social security tax on wages paid to qualifying employees.  There should not be any amount for 2011.

If an amount is shown, then your payroll information in QB may contain errorneous data.

To find the error I recommend that you print a detail of wages and deductions by employee and trace certain totals from Form 940 to the detailed printout.

Regards,
Paul

Accounting, Payroll & Pension Issues

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Paul Sid, CPA CFA

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I am a CPA and CFA with more than 20 years of assisting others to address a wide variety of tax and financial issues, including: (a) tax and timing for conversion of various retirement vehicles including 401(k), traditional IRA, and Roth IRA; (b) starting date considerations for social security benefits and related tax liabilities; (c) computation of book and tax basis, gains and losses on investments, §1031 exchanges; (d) tax benefits and deductions on principal residence, vacation homes, and investment properties; (e) acquisitions of business properties, computation of bonus depreciation, and MACRS depreciation; (f) tax as related to various martial issues, including dependences, noncitizen spouses, and divorce settlement; (g) review of college funding options and tax attributes; (h) tax computation and investment considerations for fixed and variable annuities; (i) tax considerations relating to gifting by parents and grandparents; (j) tax on employee benefits programs including retirement plans, health insurance, and other benefits; (k) tax on inherited assets including assets, insurance, and other assets.

Paul Sid, CPA CFA
FinancialEdge.net

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I have over 20 years of financial, accounting, and tax experience in working with individuals and fortune 500 companies.

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BS Accounting, CPA, CFA

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