[Veena1]

Hi

We had withholded one employee for Texas state by mistake. If I refund that amount back to him through company check which Chart of accounts does it goes to? Please let me know.

[decisionsupport]

You shouldn't issue a refund. Taxes mistakenly withheld can be recovered by your employee at the time they file a tax return.

You should stop making payroll deductions for that state if you haven't already done so.


Here is a link to HR Block that answers your question from an employee's perspective.

http://www.hrblock.com/taxes/fast_fa...ing%20&cid=951

[Veena1]

Hi

Thank you for your reply. Here I forgot to mention one thing when I say withheld(Our payroll dept didn't withheld that taxes but in his paycheck everymonth we have deducted towards withhoding tax but we didn't file taxes with that state)Now how to give him back that money.

[decisionsupport]

Reduce the balance on the taxes payable account for Texas and issue a check for that amount to your employee. I am not sure how you have your chart of accounts set up, but your entry would look something like this with an accompanying note as outlined below.

(Dr) Taxes Payable - Texas
(Cr) Cash

* To refund taxes mistakenly withheld from Mr. / Ms. XXXXXX

[Veena1]

Hi

Thanks you so much for the reply. I have one more question for payroll taxes.

The payroll company withheld SSN taxes by mistake and paid back to us. Now if I pay that employee under which a/c does it goes to?

[decisionsupport]

What account did you credit when you received the check from the payroll company?

[Veena1]

I credited in to Payroll Expenses: Social security tax (Expense)

[decisionsupport]

Ok, it seems the first two transactions were like this

1. (Dr) Payroll Expense
(Cr) Cash

2. (Dr) Cash
(Cr) Payroll Expense < ----- This is where you stand right now

At this point you have a liability to your employee for deduction from wages that should not have taken place. And, your cash balance is overstated. So you need to record a properly classified expense and reduce cash for that same amount by issuing a check. Again, I'm not sure how your chart of account looks like so you could have other expense categories related to wages. You're in a better position to make that determination, but generally your next entry would mimic the following.

(Dr) Salary Expense
(Cr) Cash

* To pay Mr. / Ms. XXXXXX for wages mistakenly withheld.


***** BE SURE TO GET A SECOND OPINION AS I AM NOT A 100% SURE *********

[Veena1]

Hi Thank you so much for the reply it really helps.

One more question we have to pay 2007 Quarterly Report (941 balance) to Internal Revenue Service. If I cut the check does it goes to payroll taxes payable?Let me know.

[morgaine300]

It gets debited to whatever account you put it into when you did the payroll. If you were putting your FIT and FICA into "payroll taxes payable" then there is where it will come back out of. Just make sure you debit those penalties into an expense account if you haven't already accrued them. :-)

[Veena1]

Morgaine

I put Fica and Federal taxes under payroll taxes: Fica (as Expense) the one which am talking about are 2007 tax balance which we have to pay now include penalty and interest. So do I have to put them under payroll expense(under expenses)?

[morgaine300]

FICA and federal tax withholdings should never have gone into an expense account. The extra matching FICA for the company is an expense, but the withholdings are not an expense of the company. That would have gone under salaries/wages. Are you charging the deductions to expenses and the charging only the net amount to salaries?

The entry should be the total gross salaries goes to the salary, wage, commission, whatever expense. Then all deductions will go into appropriate payables, depending on who it's owed to. If you're sticking the withholding part into an expense, you need to fix how you're doing that.

The extra taxes the company has to pay (such as FICA, unemployment, workers comp, etc.) will be charged to payroll tax expenses.

Either way, they all should have gone into payables because they are due to the various government agencies, and insurance companies or whatever else you're paying. What you are paying now should come back out of a payable. There's two sides to every entry and you're only telling me one side, so I don't know what happened to the other side. This all should be in payables.

The extra penalties and such, if not already accrued, does have to be charged off to an expense. You might want to take a crack at speaking with the IRS about getting some of that knocked off if you're cooperative about getting the old stuff paid.

[Veena1]

Thank you so much and can you please help me on the below:

Hi Can somebody help in this .

On Aug 14th, One of our Partner's ( Compuville ) cash book showed a debit balance of $4,000.00.
His bank statement showed a balance of $4,270.00.
On comparison the following were found: * check issued amounting to $2,500.00 has not been cashed
* The bank rejected checks amounting to $140
* Standing order for a staples order of $700 was note noted.
* A customer paid $170 directly into the bank without any notice to Us
* Bank charges of $160 were entered in the bank statements only.
* A dividend of $250 was paid directly into the bank and not recorded in the cash
Book
* Checks for $1,650.00 were entered into the cash book and deposited in the bank
But had not been cleared (deposited).
Prepare a bank reconciliation statement for the month .

[morgaine300]

Now that is sounding like homework.

EDIT: And also found this elsewhere:
https://www.askmehelpdesk.com/accoun...le-414739.html

[srisuresh]

Hi my name sri suresh. What is the petty cash. How pass journal entry. How to post in tally.

Regards,
Thank you,
Sri suresh