I paid taxes for an employee but had to reverse the transaction now I need to record what happened. How do I record this type of transaction?

Print out the original transaction and reverse the entries.

What you posted as a credit will be a debit and what you originally posted as a debit will be a credit.

For example

Bank account CR 2000.00
Fica/medicare DB 1000.00
Fed Tax DB 800.00
State Tax DB 200.00

This entry would now be
Fica/medicare CR. 1000.00
Fed Tax CR 800.00
State Tax CR 200.00
Bank Account DB. 2000.00

Do this for each account on the original entry and they will cancel each other out.

Shirley