How do I report payroll when preparing 2018 W-2s if I only did payroll and paid the taxes for three quarters of the year and somebody else did that work for the other quarter?

by Maria A. Marini, CPA, CGMA | Jan 31, 2019

For the first quarter of this year an accountant did our payroll and paid the taxes. For quarters two, three, and four, I did our payroll through QuickBooks and paid the taxes through QuickBooks. When I prepare 2018 W-2s, do I only do the amount for quarters two, three, and four, or do I add them in and note somewhere else that taxes have already been paid on those months?

I will make a couple of assumptions:

  • You are the employer.
  • You recorded the salaries for your employees in your accounting system for the first quarter, even though an accountant did the payroll and remitted the taxes. If you didn’t, then you wouldn’t have a full year of salary expense.

Assuming the above, you need to provide your employees with W-2s that show a full year of wages and a full year of withheld taxes. The IRS won’t care who remitted the taxes, only that the correct amount of tax for each employee was remitted. If you didn’t record the first quarter of wages and taxes in your accounting system, then you need to do that.

As an employer, you are responsible for withholding and remitting the correct amount of taxes due on employees’ wages. You are also responsible for providing your employees with a W-2 that correctly states their total wages and withheld taxes for the calendar year.

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Answered by: Maria A. Marini, CPA, CGMA, is controller for the PICPA.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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