How to Set Up Quicken 2012 Payroll
A lot of people who own small businesses or who have a household employee (nannies, for example) need to deal with payroll. Although Quicken 2012 Home & Business doesn’t provide you payroll tools, here are some quick-and-dirty instructions about how to handle simple payroll situations with Quicken.
Get ready for payroll in Quicken 2012
To do payroll in Quicken, you need to set up a couple of payroll expense categories. Fortunately, doing so is not particularly difficult.
Here’s how you do this task for purposes of U.S. federal income and payroll taxes. If you employ people in a state that has a state income tax — California, say — you may also have to deal with state payroll taxes. But you can track and process these the same way you process the federal taxes. (Some counties and cities even have income taxes, but these should also work the same way.)
Set up the wages expense category in Quicken 2012
You need to set up a payroll expense category for tracking the wages you pay employees. Here’s all you do:
Choose Tools→Category List.
Quicken, with no hesitation, displays the Category List window.
Click the New button.
Quicken displays the Set Up Category dialog box.
Enter Wages as the category name by moving the cursor to the Category Name text box and typing Wages.
If you told Quicken during the setup that you’ll use Quicken to track a business, Quicken may have automatically set up the Wages category.
(Optional) Enter a description of the category.
If you want, you can type a description in the Description text box.
Select the Expense option button.
This choice tells Quicken that you’re setting up an expense category.
(Optional) Describe the tax characteristics of this category.
To further describe taxable income and tax deduction categories, click the Tax Reporting tab and then select the Tax-Related check box.
Optionally, if you want to be super-nit-picky and don’t care about wasting your time, select the Standard List Item List or Extended Line Item List option button from the Tax Reporting tab and then choose the exact tax form and form line number the category gets reported on when you prepare your federal tax return.
One caution: You won’t actually know for an absolute certainty which forms and line numbers are used until the end of the year.
Quicken adds the category to the category list and redisplays the Category List window.
Set up the payroll tax expense category
You also need to set up a payroll tax category to track payroll taxes that the employer pays, including the company’s share of Social Security taxes, the company’s share of Medicare taxes, and any other employer payroll taxes (such as federal unemployment tax or the equivalent state employer taxes).
To set up a payroll tax expense category, follow the same steps for setting up a wages expense category. You can name the category payroll taxes, or taxes-payroll, or something else that’s even more clever.