Four Tax Deposit Tips for Quicken 2013 Users - dummies

Four Tax Deposit Tips for Quicken 2013 Users

By Stephen L. Nelson

Here are a handful of suggestions about making tax deposits with Quicken 2013 easier and less painful. The fast payroll method also has a weakness you should know about.

Tax deposit tip #1: Combine payments

You can save yourself a bit of fiddle-faddling by initiating one payment that combines both the payment for an employee’s taxes and the payment for the employer’s taxes. If you do this, just be sure to split the transaction with part categorized as a wage expense and part categorized as a payroll tax expense when you go to record the tax deposit within Quicken.

Tax deposit tip #2: Combine employees

You will (of course) often have more than one employee. And in that case, you will probably combine the payroll tax deposits for all the employees.

If you do have multiple employees, you probably want to consider using either a small business accounting system, such as QuickBooks, or an outside payroll service bureau. Most of the payroll calculations and bookkeeping will be pretty easy, but figuring out what you owe in terms of payroll tax deposits can be a bit messy if you have more than one employee to pay at a time.

Tax deposit tip #3: Don’t delay your deposit

Remember you owe payroll tax liabilities (the withheld taxes, the company’s matching of Social Security tax, and so on). You shouldn’t just foolishly ignore any of your business or personal debts, of course. If you just quickly deposit your payroll taxes (immediately after every payroll), you should be fine.

Tax deposit tip #4: Know the De Minimis rule

If your accumulated federal payroll taxes are less than $2,500 for the quarter, you can pay the taxes with your quarterly 941 payroll tax return. (This is called the De Minimis rule — named after the Congresswoman Dee Minimis.) Don’t rely on this rule, however, without first checking with the IRS or your tax advisor.