Video instructions and help with filling out and completing Can Form 5495 Liability

Instructions and Help about Can Form 5495 Liability

What we're going to be going through here are some employee related liabilities here and specifically looking at payroll deductions now common types of payroll deductions are taxes insurance premiums employee savings and union dues that the employee would be paying now if a company has not remitted the amounts deducted to the proper authority here for these payroll deductions at the end of the accounting period it should recognize them here as a current liability here that the company would recognize current liability for whatever those payroll deductions are now let's just look at we're going to be looking at some examples some governmental types of payroll withholding taxes here and first would be Social Security taxes or the FICA tax here you report the amount of unremitted tax on the gross wages paid as a current liability here and as an operating expense now looking at unemployment taxes or food is as they refer to it here you'd record the amount of a crude but unpaid employer contributions as an operating expense and as a current liability when preparing your financial statements and then for income tax withholding you'd have both federal and state here the tax laws require that the employers withhold from each of the employees pay the applicable income tax due on these wages here so what you have to do here is you have to determine what your payroll deductions would be here you'd have to class them by the various items and and then what you'd want to do is you'd have to set a determine who pays what here for each of those items and then you'd separate them out here what the employee would be paying here and then what the employer would be paying here so you'd separate those things out but in either case here the employer would report these as liabilities until they remit it so the employer is actually taking money out of the employees pay or their check here and they're setting it aside here for any of the liabilities that the employee would are the any of the taxes that the employee would have to be paying or other things like a hospital insurance your union dues and then also you've got the employee are here so in either case here the employer reports as liabilities here on their balance sheet until they're admitted to whatever authority might be there for taxes the federal and state and maybe union dues or whatever that would be going to the Union office here so we're going to be going through a basic example here just to see how we'd record these here on our balance sheet in our income statement hair as liabilities here and as expenses what we're going to be going through here is just a basic example here on some payroll deductions and what we have to do is we have to determine what the employees payroll deductions would be here and also what the employees payroll taxes would be here on this on this payroll here and the key is you have to separate the employee here from the employee an employee or on what they would be paying here now before we get into our example let's just make a point here withholding taxes are based on tax laws such as wage limits here and wage credits and also tax credits and there's it's complicated and can be complex here so you for each case here when you're making these withholding taxes and deductions here you have to determine what determine each case separately here based on tax law so let's just get in look at our basic example here we're going to have a weekly payroll here by a company of $10,000 and then they're going to have these taxes here a FICA Medicare taxes seven point six five percent unemployment federal tax here of 0.8 percent unemployment state of four percent here and then there's withholding here on the employees wages that's what the employee is paying here of thirteen hundred and twenty dollars here on this weekly payroll here and then the employees also has some $88 worth the union dues that they have to pay so just looking at that first our employee payroll deductions what we'd have our will holding tax payable here that was taken out of the employees check thirteen hundred and twenty dollars and they also have to pay their portion here the FICA tax at seven point six five percent here of the ten thousand dollar weekly payroll here oh that would be seven hundred and sixty-five dollars union dues payable here of eighty-eight dollars oh and then there's cash here well the wage expense would be debited here for $10,000 so your cash is just the balancing amount here as your credit balance here of seven eight hundred and twenty seven dollars now for the employees payroll taxes they're going to have a FICA tax payable again that seven point six five percent here on the $10,000 for $765 federal unemployment tax the point 0.8 percent here eighty dollars here on the ten thousand and then state unemployment tax payable four percent here in the ten thousand dollars for four hundred dollars so totaling those up here a credit amount here you're going to get a debit here to the payroll tax expense of twelve hundred and forty five dollars all right so let's go and look at how we'd record these here so you get a little idea here how we set up our payables here so first we're going to look at the employee payroll deductions remember we have that imp and this is again what the employee gets credit for these costs here that we're going to be looking at it because the employee actually pays these items here but the company is going to be taking them out of their pay here to make sure they get