The following steps will explain in detail how to add a new Tax Type...
1.First open the Tax Types form and then click the New button to bring you to a new record. The cursor will be flashing at the top of the form in the Tax ID field.
2.You must assign a unique Tax ID for each Tax Type, which can be 15 alphanumeric characters in length. For example: Illinois State Tax might be referenced as 'ILLSTATE'. When you have finished entering data for each field, press the TAB or ENTER key to move your cursor to the next field.
3.You can then enter a Description for the Tax. This description will be seen next to the Tax ID in all the Tax ID combo boxes throughout the program. A recommendation might be to identify in the description whether it is an employee tax or a company tax. Here is an example: FICA SS (E) which stands for the employee.
4.The Calculation Type combo box is the method used to determine the amount of the tax. You must enter a value in this field for each tax type. There are choices, which are described below.
System: This calculation type cannot be used when adding new tax types. It is used only for default system taxes like Federal and FICA and is not one of the seven choices.
Fixed Amount: Allows an actual non-calculated amount to be entered for the tax.
Hourly Amount: Allows an amount to be entered for the tax that is based on the hours worked.
Hourly Percent: Allows a percentage for the tax to be calculated based on the hours worked.
Percent: Allows a percentage for the tax to be calculated on the gross paycheck.
State: Allows a selected state tax to be calculated.
County: Allows a selected county tax to be calculated.
Local: Allows a selected local tax to be calculated.
5.The Paid By field will indicate if this is an Employee tax or a Company tax.
6.Based on the Calculation Type selected, you will either see a field named Amount, Percent or State. If the Calculation Type is a 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 the maximum annual amount that can be taxed for a tax type in the Limit field. If there is no limit then enter zero in this field.
8.If you selected County in the Calculation type field, you will be able to select or enter the County that the tax is applicable for.
9.The numeric Sort Order field provides a great way of creating a custom sort order for the tax types. For each record in this form, enter a unique sort number. When you add a new tax type you will notice the sort field automatically advances to the next unique number.
10.Enter the Account ID you want to use by selecting it from the combo box. Normally tax types are setup as liability accounts.
11.Select a state from the Tax State combo box to associate that tax to a certain state.
12.Enter the Expense Account for the tax type in this field. View a list of Accounts by selecting the down arrow.
13.The Tax Agency field is where you may enter assign tax agency for your tax types. Click the Ellipse button to open the Tax Agency form where you can add tax agencies.