How do I reconcile payroll tax liabilities to deposits?

Question

Expert Bookkeeping Services · Accepted Answer

Compare payroll registers, liability accounts, filed returns and payment confirmations for the same period. Payroll tax expense and unpaid tax liabilities are different balances, and filing a return does not itself make the payment. Separate the payroll components Check gross wages, employee deductions, employer taxes and net pay. Withheld amounts normally remain liabilities until deposited, while employer taxes also create an expense. Reconcile each account to payroll reports and confirm that payments were applied to the correct tax period. State and local obligations require separate review. Investigate differences promptly Timing differences may be legitimate, but unexplained balances can indicate missing payments, duplicate entries or payroll corrections. Retain federal and state filing acknowledgements and deposit confirmations. Follow the applicable deposit schedule rather than assuming every tax is paid quarterly. Have a payroll professional review notices or material discrepancies before changing filed figures.

How do I reconcile payroll tax liabilities to deposits?

Short answer

Detailed answer

Separate the payroll components

Investigate differences promptly

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