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Robert M.
Robert M., Consultant
Category: Financial Software
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Experience:  30 yrs. of computer experience in financial and marketing departments.
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Re Quick Books Pro - how to I record an employee year end

Customer Question

Re Quick Books Pro - how to I record an employee year end bonus? Is it included in the W-2?
Submitted: 1 year ago.
Category: Financial Software
Expert:  Angie Russell replied 1 year ago.

You record it just as you would a payroll check. If you did not withhold taxes on this bonus, you will need to back into the taxes and use 0 for federal withholding. (But Social Security and Medicare must be accounted for) and yes, it does appear on the W-2.

To back into the taxes use this formula: Net pay divided by .9235...

so... if your bonus was 100.00 you divide 100.00 by .9235 and you get 108.28 as a gross. Enter this as an additional paycheck in Quickbooks and zero out the federal withholding that is automatically figured.

Year end bonuses are not exempt from taxes and should be handled as an additional payroll.

I hope this helps, if you need clarification or additional information please feel free to respond. If this answers your question please leave a rating as this is how I am compensated.

Expert:  Angie Russell replied 1 year ago.

I just realized you are in Arizona... this means you will need to zero out any Arizona withholding for state income tax as well. If you have a local tax, you will need to adjust the gross to account for that amount as well.