How to Deposit Taxes from Quicken 2012

By Stephen L. Nelson

Make no mistake. Uncle Sam wants the money you withhold from an employee’s payroll check for federal income taxes, Social Security, and Medicare. Uncle Sam also wants the payroll taxes you owe and have determined in Quicken 2012 — such as matching Social Security and Medicare taxes and federal unemployment taxes.

Making the payments for these taxes is easy.

Deposit the employee withholding determined in Quicken 2012

To remit the payroll taxes you withhold from an employee’s check, follow these steps:

  1. Sign up for the U.S. Treasury’s electronic funds tax payment system, also known as EFTPS.

    You should visit the EFTPS website a few weeks (at least a couple of weeks and preferably more) before you want to process payroll. Find the link that lets you sign up for the service. And then carefully follow the on-screen instructions to create your EFTPS account. Note that you only need to take this step once.

  2. Log into the website.

    This is easy. Click the link that indicates you want to log on to the website. Then provide three bits of information: your employer identification number, the PIN (personal identification number) and your password. Both the PIN and your password come in the letter that welcomes you to the EFTPS system.

  3. Indicate you want to make a payment equal to the payroll taxes that you withheld from the employee’s check.

    Within Quicken you need to categorize the check in the Wages expense category.

    Do not categorize the check that remits the employee’s portion of his or her taxes as falling into the payroll tax category. That would be a mistake. It seems like payroll tax expense would be the right category. The withheld taxes are tax expenses of the employee, however — not tax expenses of the employer. The money represents a wage expense to the employer.

Pay employer payroll taxes as determined in Quicken 2012

You have to match any Social Security and Medicare taxes paid by the employee. To record the payment of these payroll taxes, you follow a similar set of steps as in the preceding section. Indicate you want to make another EFTPS payment equal to the payroll taxes you owe as the employer.

When you pay the employer’s payroll taxes — such as the matching Social Security and Medicare taxes — you want to categorize the check as a payroll tax category. This money absolutely does represent a payroll tax expense to the employer.