Virtual Assistant Forums | Work from Home

StephanieP · #1 (**permalink**) 07-16-2009

I'm reviewing a client's taxes (she did them herself) and have run into a snag that's confusing me a bit.

I printed the completed WV/IT-101 and also the Payroll Summary for the 2nd Quarter to compare them. Everything looks good (i.e. matches) BUT the Total Payments for Quarter (Must Equal Line 3) doesn't match the taxes that were withheld (Line 3). It seems that the client has added a mileage (per diem) payroll item and that, although Quickbooks seems to be counting it as income and taxing it, the tax return feature is not. Can someone explain that to me, please. If something is set up wrong, is there anyone that can tell me how to set it up correctly so I can pass it along to my client? Also, even though it says that the Total Payments should match line 3 (total income tax withheld), the error checker didn't flag anything.

We reimburse for mileage on our personal vehicles as well (paying the current per diem rate) BUT we don't tax it. Should we be?

**UPDATE** For some reason, the client thought that her quarterly taxes were due on 6/30/09 so she only pulled the data as of about the 15th or so of June...DOH! Can you do an ammended return on quarterly taxes especially since they're not even due until the end of the month?

But I am still curious about the mileage per diem and taxes

TIA

debhowardgreenleaf · #2 (**permalink**) 07-16-2009

Stephanie:

If the mileage reimbursement was put through payroll, it will show up on that Payroll Summary. If you don't want it to show up on the Payroll Summary, then you can just reimburse people with reimbursement checks, outside of the payroll system.

As it stands, the Payroll Item may well be setup properly. It should not be taxes and, according to your message, it isn't being taxed for WV. It's not important to match to the Payroll Summary exactly. If you want to know exactly how the WV taxes are being calculated, run the following report: Employees & Payroll > Summarize Payroll Data in Excel. Make sure you're "sucking in" last quarter's data into Excel. Once the Excel data is populated, go to the "State Wage Listing" tab in the Excel workbook. It will show you exactly how the WV taxes were calculated

HTH!
Deb

P.S. -- PM me if you want more details

StephanieP · #3 (**permalink**) 07-16-2009

Thanks so much!

After I figured out what was actually going on (the report the client did didn't include the entire quarter) it doesn't look like she's taxing their mileage reimbursement so I think she's good.

I'm so glad that you went further with the Summarize Payroll Data Excel report. I've exported that before and I think that it confused me more than it helped so you're instruction will help me quite a bit.

debhowardgreenleaf · #4 (**permalink**) 07-16-2009

My pleasure

For these reasons, among others, I always discourage people from including mileage reimbursements (or tool, or other expense reimbursements) in paychecks. I know the functionality is there, but it just makes all the gross totals look a little whacky!

Deb

Office Goddess · #5 (**permalink**) 07-16-2009

Originally Posted by debhowardgreenleaf

My pleasure

For these reasons, among others, I always discourage people from including mileage reimbursements (or tool, or other expense reimbursements) in paychecks. I know the functionality is there, but it just makes all the gross totals look a little whacky!

Deb

I ditto that! although it IS a bit of a pain to issue a separate reimbursement check, I ONLY pay payroll expenses on paychecks. To get around the 'name in use' issue, payroll is set up/issued w/a middle initial in the name and reimbursements are not (e.g. Employee = Lily E. Chambers and Vendor = Lily Chambers)

Business-Bytes · #6 (**permalink**) 07-16-2009

Originally Posted by StephanieP

Thanks so much!

After I figured out what was actually going on (the report the client did didn't include the entire quarter) it doesn't look like she's taxing their mileage reimbursement so I think she's good.

Just a quick question: Is it going to show up on their W-2 as income?

debhowardgreenleaf · #7 (**permalink**) 07-16-2009

If she's using QuickBooks and she's coded the mileage reimbursement Payroll Item as an "Addition," then, no, it will not be included in gross income.

Just like 401(k) contributions are properly deducted from gross income for Federal purposes, an Addition-type item like mileage reimbursement will be deducted from Federal, State and local gross income when reported on the W-2.

As with most things in QB, the devil is in the details of the setup. If setup properly, QB will process everything perfectly

Deb

Business-Bytes · #8 (**permalink**) 07-16-2009

So then it would show up in box 14 on the W-2 coded as a deductible employee expense then, if my brain is thinking as it should (I'm looking at it from the tax preparer end of it).

Thanks, Deb!

debhowardgreenleaf · #9 (**permalink**) 07-17-2009

Actually, a mileage reimbursement wouldn't show up on the W-2 at all, since it has nothing to do with taxes. Just like a child support deduction wouldn't show up on the W-2, unless someone chose to put it in Box 14 for the heck of it.

Deb

StephanieP · #10 (**permalink**) 07-17-2009

What a great thread this has become (for me anyhow). I'm definitely printing this out so that I can remember it and make note. My client has their's set up as a per diem not an addition, if I remember correctly. I'll go look again to make sure and advise her that it would probably be best to either do a separate reimbursement check (that's what I do here) or make sure that it shows up as an addition on the paychecks.

Thanks so much, this is such a great place to hang out