Before you can enter employee tax types you must add an employee or select an existing employee. If you need to add a new employee, open the Employees form and then click the New button at the top of the form. Then refer to the Adding Employees section for help on adding new employees.
The following steps will explain in detail how to add Tax types for the Employee and Company in the Employees form under the Taxes Tab. It is important to know that you must first setup all the necessary Taxes for your company in the Tax Type form. See: Adding Tax Types for details.
The first step is to decide if you want to manually select each Tax through the Employee Taxes Tab and Company Taxes tab or if you want to setup specific Groups of Taxes. You can use the Group combo box at the top right corner of the form to select a Tax Group, which will quickly add several tax types to the Employee Taxes tab and the Company Taxes tab. This is a convenient way of adding multiple tax types at one time based on a tax group. To setup Tax Groups see the Adding Tax Groups section.
1.You can click the Add button at the bottom of the Tax List box and add one or more tax types for this employee.
2.When you click the Add button the Add Tax Types form will open. This form will list all the Tax Types that are available to add to the Employee Taxes List box. If you do not see a particular tax type you want to use, make sure it has already been created in the Tax Types form. You will not be able to select the same tax type more than once, so if it is already in the Tax List box it will not appear in the Add Tax Types form. Employee Taxes are typically referenced with (E) after the tax name. That will identify that this specific tax is for the Employee.
3.In the Add Tax Types form use your mouse to click on all the tax types you want to add to the Employee Taxes tab. There is also a Select All button at the bottom of this form, for your convenience. When you have selected all the tax types you want to add, click the OK button. The Add Tax Types form will close and all the tax types you selected will be added to the Employee Taxes box on the Employee form, Taxes tab. Highlight on a Tax and glance to the right in the Tax Information area and you will view all the fields of information are exactly like what was setup in the Tax Types form.
4.You now have the choice of modifying any of the tax types that were added to the Employee Taxes Tab box. You can do this by clicking on the Tax type you want to edit, then edit the fields in the Tax Information area, which are described below.
5.To remove a tax type that you added refer to the Deleting Employee Taxes topic.
The next step is to follow the same procedures listed above for adding the Company Taxes in the Company Taxes Tab for this particular employee. For convenience, we have listed the necessary steps to select the Company Taxes.
1.The first step is to click on the Company Taxes Tab.
2.You can click the Add button next to the Tax List box and add one or more tax types for this employee.
3.When you click the Add button the Add Tax Types form will open. This form will list all the Tax Types that are available to add to the Company Taxes tab. If you do not see a particular tax type you want to use, make sure it has already been created in the Tax Types form. You will not be able to select the same tax type more than once, so if it is already in the Tax List box it will not appear in the Add Tax Types form. Company Taxes are typically referenced with (C) after the tax name. That will identify that this specific tax is for the Company.
4.In the Add Tax Types form use your mouse to click on all the tax types you want to add to the Company Taxes tab. There is also a Select All button at the top of this form, for your convenience. When you have selected all the tax types you want to add, click the OK button. The Add Tax Types form will close and all the tax types you selected will be added to the Company Taxes box on the Company Taxes tab. Highlight on a Tax and glance to the right in the Tax Information area and you will view all the fields of information are exactly like what was setup in the Tax Types form.
5.You now have the choice of modifying any of the tax types that were added to the Company Taxes Tab box. You can do this by clicking on the Tax type you want to edit, then edit the fields in the Tax Information area, which are described below.
6.To remove a tax type that you added refer to the Deleting Employee Taxes topic.
You can modify all of the tax information for the highlighted Tax Types in this area. Listed below are the descriptions of each of these fields.
1.The Tax ID field is read only and displays the Tax ID that is selected in the Tax List box.
2.In the Description field you can modify the default description for the selected tax type.
3.The Calculation Type combo box is the method used to determine the amount of the tax. Click the Ellipse button next to it to enable and disable this field.
A value will be displayed in this field for each tax type. There are choices, which are described below. If the information you see is not correct, return to the Tax Types form to make your changes.
System: This calculation type cannot be used when adding new tax types. It is used only for default system taxes like Federal and FICA taxes.
Fixed Amount: Allows an actual non-calculated amount to be entered for the tax.
Percent: Allows a percentage for the tax to be calculated on the gross paycheck.
State: Allows a selected state tax to be calculated.
4.Enter the Filling Status you want to use by selecting it from the combo box. Normally the filling status is either Single or Married. Some States actual have additional filling status.
5.The Active check box can be used to make a tax type active or inactive. When the Active check box is deselected, the tax type will be disabled and it will not calculate.
6.Based on the Calculation Type selected you will either see a field named Amount, Percent or State. If the Calculation Type is Fixed Amount then the Amount field will be displayed. Enter the actual amount you want the tax to be. If the Calculation Type is Percent then enter the percent you want the tax to be calculated on. If the Calculation Type is State then enter the State Name you want the tax to be calculated on.
7.Enter any additional withholding amounts in the Extra Withholding field. This would be a fixed amount that would be withheld in addition to the selected tax.
8.Enter the maximum annual amount that can be taxed for the tax type in the Limit field. If there is no limit then the enter zero in this field. This field will only be active if the Calculation Type field is set to either Fixed Amount of Percent.
9.Enter the Liability Account you want to use by selecting it from the combo box. Normally tax types are setup as liability accounts. An expense account can be selected in the next field, if appropriate.
10.Depending on the selected tax there may be a Federal, State and Additional Allowance fields displayed. Enter the appropriate number for these fields.
11.You will see a Paid By field that will display whether the tax is for the Employee or the Company.
You can select the employees W-2 options in this area. This information will be displayed on the Employees W-2 Report.