Taxes: Implementation Activity

In the following implementation activity, you will learn how to set up taxes in payroll.

Story

Suppose that you as a system administrator need to create all necessary tax codes related to the work locations stored in the system.

Configuration Overview

In the U100 Payroll snapshot, the following tasks have been performed for the purposes of this activity:

  • On the Tax Categories (TX205500) form, the TAXABLE and EXEMPT tax categories have been configured.
  • On the Chart of Accounts (GL202500) form, all GL accounts that you will use for tax reporting purposes, including 24100 (Tax Payable) and 65100 (Other Tax Expenses), have been added.

    The 24100 liability account will be used for accumulating the tax amounts to be paid to the tax agency in a tax period. The 65100 expense account will be used to record tax adjustments and expenses for the tax agency.

  • On the Vendors (AP303000) form, the IRS and NYTAXDEP tax agencies have been configured.

Process Overview

You download the latest tax details from the Tax Symmetry engine by clicking Update Taxes on the form toolbar of the Tax Maintenance (PR208000) form and then you enter missing required settings on the Tax Codes tab of that form.

System Preparation

Before you start setting up taxes in the system, you should launch the MYOB Advanced website and sign in as a system administrator by using the following credentials:

  • Username: gibbs
  • Password: 123

As a prerequisite activity, in the company to which you are signed in, be sure you have completed the Work Locations: Implementation Activity.

As a prerequisite activity, in the company to which you are signed in, be sure you have performed the activities in the preceding lessons of this part of the course.

Step 1: Creating Taxes

To download tax details from the tax engine and create all necessary taxes in the system, do the following:

  1. Open the Tax Maintenance (PR208000) form.
  2. On the form toolbar, click Update Taxes.

    Wait until the update process is completed. As a result, the Tax Codes tab of the form becomes populated with tax data.

  3. Review the data downloaded from the tax engine and the error messages about missing tax settings.

Step 2: Specifying Missing Settings

Because required settings are missing in the tax codes listed on the Tax Codes tab, do the following:

  1. In the Tax Codes table of the Tax Codes tab, do the following:
    • Select the IRS vendor for each federal tax and the NYTAXDEP vendor for each New York tax.
    • For each tax code, click View Tax Details on the table toolbar and in the Tax Details dialog box, which opens, select Code Name in the Invoice Description Source box and then click OK.
    • Specify missing expense accounts and liability accounts, if applicable. For example, specify 24050 in the Liability Account column for all listed taxes, and 65100 in the Expense Account column for each tax of the Employer Tax category.
  2. In the Tax Settings table of the Tax Codes tab, for each tax code that has an error message displayed, specify appropriate values for the required attributes. For instance, specify the following values for the Rate attribute:
    • 6.2 for the ER FUTA tax
    • 3.2 for the NY ER SUTA tax
    • 0.5 for the NY ER SUTA SC tax
  3. On the form toolbar, click Save.