While most business owners have a general understanding of payroll taxes, many overlook changes in tax rates. As such, they don’t take out the correct amount of taxes from their employees’ paychecks. If you use Quickbooks, however, there’s a quick and easy way to prevent this from happening. To learn more about updating payroll taxes in Quickbooks, keep reading.
You Need an Active Payroll Subscription
Before we begin, it’s important to note that you need an active payroll subscription with your Quickbooks account to take advantage of this feature. As explained on the official Intuit website, a subscription costs $74 per month plus $2 per month for every employee (Quickbooks included). Most business owners will agree, though, that it’s well worth the investment. Quickbooks payroll will run and file your payroll taxes, transfer data from previous providers, check for errors and more.
Updating Payroll Taxes
Once you have an active payroll subscription, you can update your payroll taxes in just a few easy steps. This is done by logging in to your Quickbooks account and selecting Employees > Get Payroll Updates > Update. Quickbooks will then download the most recent payroll tax table. After the download is complete, you should see the following message: “A new tax table and/or updates to your payroll tax forms have been installed on your computer. Click OK to read about the changes.” Confirm the changes by clicking “OK” to proceed and finalize the process.
So, how often should you update your payroll taxes? According to Intuit, business owners should download either once every 45 days or every time they pay their employees, whichever one comes first. Doing so ensures that your employees are taxed at the correct rate every time they are paid. Failure to do so could cause accounting and financial headaches later down the road. So, take a proactive approach by updating your payroll tax table on a regular basis.
What About Quickbooks Online
So, how do you update payroll taxes in Quickbooks Online? Well, being that it’s always connected to the Internet, you don’t have to download or otherwise update your tax table. Intuit will automatically pull new tax data and apply it to your account. If you use Desktop Quickbooks or Hosted Quickbooks, on the other hand, you should refer to the steps outlined above to update your payroll taxes.
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