The Basics: Intuit QuickBooks Basic, Standard & Enhanced Payroll

Let us help you through the busy year-end. Use this information to help prepare your tax forms, including your employees' W-2s, your federal Form 941, and state year-end forms and reports. Use this handy guide, along with the detailed how-to instructions within QuickBooks, to perform year-end closing in QuickBooks.

Step 1: Verify employee data

The end of the year is a good time to review employee information that can affect W-2 forms and, possibly, paychecks issued in the next tax year.

• Names, address, and social security numbers
• Retirement plan eligibility

To review employee data in QuickBooks:

1. Go to the Employee Center and click on the Employees tab.
2. Click the arrow button next to the View drop-down list.
3. Review the names and social security numbers for any errors or missing information.
4. If you need to review additional details in your employee records, double-click the name of the employee and review the address and other personal information.
5. From the Change tabs drop-down list, click Payroll and Compensation Info.

If the Employee is covered by a qualified pension plan checkbox is checked in the employee record then the same checkbox will be marked on the W-2 form. You can also select or clear the checkbox directly on the W-2 form.

FAQs

• Federal Form W-2 and W-3

Step 2: Verify wage and benefit information

Review benefit information for your employees.

Before you create paychecks in the new tax year, confirm that all compensation and benefit types are correct, and that the rates for each is correct:

• Deferred compensation
• Group term life insurance
• Third party sick Pay

To review benefit information:

1. Go to the Lists menu and click Payroll Item List.
2. Double click on the item to review the setup.
3. Navigate to the Tax Tracking type window and ensure the correct Tax Tracking type is selected.  If you are unsure what Tax Tracking Type should be selected, consult your accountant or the agency that manages the benefit for your company.
4. Navigate to the Default Rate and Limit window and ensure the default rate and annual limit are correct.  If there are different rates or limits for individual employees, you may want to ensure these fields are blank and set the rate and limit for each employee separately.
5. Click Finish to save any changes you have made.

Review any benefits that have been added to the employee defaults or to an individual employee record:

1. Go to the Employee Center and click on the Employees tab.
2. Double-click the employee name
3. From the Change tabs drop-down list, click Payroll and Compensation Info.
4. Review the information in the Additions, Deductions, and Company Contributions section. If you need to edit the information, click in the field and make the edit and then click OK.
5. Click OK to save your changes.

Any future paychecks created for that employee will include the new information.

Step 3: Perform any year-end calculations

Bonuses

To write a bonus check for an employee:

1. Go to the Employee Center and click on the Payroll tab.
2. In the Pay Employees section, click Unscheduled Payroll.
3. In the Enter Payroll Information window, select the employee to whom you?re giving a bonus.
4. Click Open Paycheck Detail.
5. Clear any earnings or benefits for the selected employee by clicking in each field that has a rate or number and pressing the Backspace or Delete key.
6. In the Item Name field, add the bonus item and enter the amount of the bonus in the Rate field.  Note:  If you want to give the employee the entire bonus amount, check the Enter net/Calculate gross checkbox (this option is only available with Enhanced Payroll).
7. Make sure that the Do not accrue Sick/Vac checkbox is marked
8. Click Save & Next or Save & Close.
9. Click Continue.
10. Click Create Paychecks.

Review sick and vacation settings

To review sick and vacation hours for an employee:

1. Go to the Employee Center and click on the Employees tab.
2. Double-click on the name of the employee to access the employee record.
3. In the Change tabs drop-down list, click Payroll and Compensation Info.
4. Click the Sick/Vacation button.
5. In the Sick and Vacation sections, review the sick and vacation settings. For example, if your company sick or vacation policy indicates that the hours reset every January 1st, then make sure that the Reset hours each new year checkbox is checked.
6. Click OK to save any changes and close the Sick and Vacation window.
7. Click OK to close the Edit Employee window.

Step 4: Order year-end supplies

You can order your year-end supplies from Intuit. To do so:

Order your year-end supplies online from the QuickBooks Checks, Forms, and Supplies Web site: http://intuitmarket.intuit.com/fsg/dept.asp?dept_id=11&brand=1&track=9388

Or

Order by phone: 1-800-548-0289

Step 5: Check data from last year

Terminated Employees

Make sure that terminated employees are released correctly in QuickBooks.

Regardless of the current employee status, any employee who received a paycheck during the year will receive a W-2 form for that year.

To verify that terminated (released) employees are set up correctly in QuickBooks:

1. Go to the Employee Center and click on the Employees tab.
2. Change the View to All Employees.
3. Click the name of the released employee.
4. Review the transactions in the list on the right..
5. Double-click the termination (typically the last) paycheck and click Paycheck Detail. Ensure all vacation and sick time has been paid out.
6. Close out of the paycheck.  Do not save any changes.  If you need to pay out vacation or sick time, create a new check for this amount and deliver to the employee.
7. Double-click on the name of the released employee to access the Edit Employee window.
8. In the Change tabs drop-down list, select Employment Info.
9. Verify that all information is current and that the Release date is correct.
10. Click OK to close the Edit Employee window.

Step 6: Review employee wages and benefits

The information contained in the Intuit QuickBooks Payroll Year-End Center is meant to provide general information about the payroll process and is not intended to provide tax or legal advice. Always consult your tax professional when preparing tax documents.