How to Prepare Your Clients to Pay and File Payroll Tax

How to Prepare Your Clients to Pay and File Payroll Tax

When your clients sign up for a payroll service using integrated Intuit® payroll, their selection will affect your involvement in preparing payroll taxes.

There are two choices, “Done for you” and “Do it Yourself.” QuickBooks® Full Service Payroll is the “Done for you” option, which means Intuit takes over all the necessary steps to pay your client’s payroll taxes, filing federal, state and local tax quarterly and annually.

For purposes of this article, we will discuss the steps required in paying payroll taxes using QuickBooks® Online Payroll, otherwise known as “Do it Yourself” and assuming it is a brand new client without history.

Pro Tip: There are additional considerations when a client is setting up QuickBooks Online Payroll when checks have already been written for the current year. QuickBooks Online navigates through the steps with you, but due to the complexity of setting up historical payroll values, we recommend clients work with a payroll specialist certified in QuickBooks Online to make sure the entries balance and tie to the payroll tax returns already filed.

To Get Started:

After ordering QuickBooks Online Payroll (QBOP), go to the gear and select payroll to get started with the required setup before you can run payroll.

Each section requires completion. We will focus on withholding and paying taxes.

When you select the first box, E-file, and e-pay:

We recommend you choose E-pay and e-file which will require getting set up with an EFTPS account to pay and file federal taxes. For most states, you can also get set up to pay and file your state taxes electronically After that’s filled out, you need to click Employees on the left and then click GET SET UP.

The next step is to add employees. QuickBooks online makes this step super easy as you navigate through the setup.

You can EVEN email the employee access to an online portal for them to enter their personal information that is listed on a W-4.

The next question also makes processing payroll super easy: setting up payroll schedules. When you select from the drop down and fill in the dates, it comes up with the next four pay periods and associated pay dates so you can verify it’s correct.

Now that you have added employees for withholding purposes, you are ready to move to the tax setup where you will provide the employer account numbers, choose a payment schedule (such as semi-weekly, monthly or quarterly or another variation) and set up State Quarterly Unemployment tax rates. It is critical that at this point you enter the correct Unemployment rates here. It can be adjusted later, but the process is much smoother if you do this now.

The next step for Tax Setup. Go back into the gear and Payroll Settings.

This is the area where you can set up the frequency in which they pay payroll taxes. For example, federal taxes can be paid monthly, quarterly or right after they run payroll (Semi-Weekly).

After your payroll setup is complete, it’s time to run payroll. After checks are processed, the next step is to process all the payments of the taxes due. In this example, the federal taxes withheld and the state taxes withheld are due, while unemployment taxes are accruing for the quarter.

Go into the TAXES on the left menu.

Click Pay Taxes and this screen will show up:

In this case, the link says “Create payment” rather than “Record payment”. If the system says “Record payment” then E-Services aren’t set up, but if it says “Create payment” then they can trigger the payment through our system to be sent to the tax agency. 

When you click Create Payment and this screen will show up:

If you are set up to electronically pay taxes, the following screen will show an “E-pay” button in the bottom right corner on the following screen. You can choose to pay it earliest possible or latest possible date or some other date that you specify. When you click “E-pay” your payment will send to the state agency on your behalf. If you do not wish to send the payment electronically through the product, you can select “Make Payment Myself” and the button at the bottom will change to say “Record.” This makes it clear if you are initiating an electronic payment or just marking in the payroll account that the payment was made outside of the system.

As you can see in the examples above for QBOP in QuickBooks Online, there are several steps required to set up your payroll taxes. Again, we recommend your clients work closely with an expert to make sure the setup is done properly. If they are setting this up in the middle of the year, they need to enter all the history so that the employee’s check stub will be accurate, year-to-date taxes are calculated accurately and to ensure that annual forms such as W-2s and Form 940 accurately report active and terminated employees.

While the process of validating these pay details can be tedious and time-consuming, QuickBooks Online Payroll includes in-line help to navigate through setting up your account. If you click the “?” in the top right corner of the page, you’ll see FAQs related to where you are in the product.

For more information:

Editor’s note: This is the third article in a series of articles on payroll by Carrie Kahn. Be sure to read "How to Choose the Payroll Product That’s Right for Your Client" and "How to Make Payroll More Efficient for Your Clients."