Warning / Peachtree W-2

[RitaB]

I have a company here where the owner frequently made errors in the SS/MC tax witthholding. (Can't wait to see what she does for 2011.)

Anyhow, when I post her payroll checks on Peachtree each month, I just adjust FIT to take care of her SS/MC tax error. At times, I have had to enter positive numbers for FIT. The payroll registers add correctly. The W-2's however, do NOT consider the sign of the FIT amounts.

So, if an employee's FIT amounts were: -10, -12, and +5, the amount in box 2 of the W-2 is showing 27 dollars withheld. This is not cool, and I thought I might save somebody a headache by posting this disturbing experience. I will also notify Peachtree.

[Maribeth]

But, Rita, I do not believe that you can have a "negative" FIT. You can have zero, but not below that. In your example, the client would have a negative 17 in FIT.

If you just need to report the correct amount, which is a positive amount after the deductions, can you not just override on the W-2?

Maribeth

[RitaB]

Yes, I did override

But, Rita, I do not believe that you can have a "negative" FIT. You can have zero, but not below that. In your example, the client would have a negative 17 in FIT.

The payroll register does indeed show -17 for the FIT amount. That is absolutely correct.

Box 2 of the W-2 SHOULD take the absolute value of the SUM of the FIT entries, (and the sum is -17), and print 17.

Peachtree is adding the absolute value of all the the individual FIT amounts. In a normal world, where you don't have to rob FIT to adjust for deficient SS/MC withholding, that's just peachy. (Arr. Arr.)

I did override on the W-2 to print 17.

[Snaggletoof]

Every Tub

Rita, I can tell you don't have any Alabama clients, where FIT liability is a deduction, and FICA/Medicare is an itemized deduction. Even if the wrong amounts are withheld, the deduction is limited to the wrong amount.

I think I know what you're trying to do - fool the system into netting out to a proper number, and am not convinced one way or another this is right or wrong. But it is what it is, and this client may have to cough up some money when his 941 is filed, and there may be some hokey-looking W-2s. Not every system allows processing of negative numbers in certain fields.

From where you and I come from the mis-stated Bible passage "Every tub shall sit on its own Bottom" means whatever comes out for these deductions really does come out, and if it comes out red, yellow, and blue this does not mean orange, purple, and green. You don't need to be the go-between agent which tries to upstage a software giant simply because this guy doesn't know what he's doing.

[RitaB]

Uh

You don't need to be the go-between agent which tries to upstage a software giant simply because this guy doesn't know what he's doing.

Peachtree has a formula that's incorrect. I was just trying to give others a heads up.

The Peachtree Payroll Register says FIT withheld is 17. Box 2 of the Peachtree W-2 says FIT withheld is 27.

If the correct FIT is 17, and the employer submits 17 in tax, but the W-2 (and W-3) say 27 was withheld, I get a letter on April 13 to deal with cause IRS wants the other 10 bucks.

And, yes, that's why we check to make sure our reports and W-2's balance.

[Snaggletooth]

My Apologies

...misread your post and jumped to conclusions. Didn't know you were having to deal with a bug in the software.

Sorry for the diatribe. But I've got a spare tub if you need one...

[RitaB]

No problem

I learned a valuable lesson. What I think is clear as a bell - maybe not so much.

On another forum, I had a guy offer to show me how to figure payroll deductions. He said I could send him a personal message.