941 reconcilliation with Employer's Payroll Report 9.0.38

[MCressy]

My 941 doesn't correlate with my MTD Employers Payroll Total Report. My February report for the month is $.01 short for the Employer's Federal Liabilities. January and March are spot on, but the report for February is off 1 cent.

What's strange is that the QTD calculates correctly and this number is placed on the 941.

The problem is that I underpaid by the $.01 for February.

Does the program have a rounding issue?

Thanks,

Mark

[Paul Mayer]

Actually the reports show you what is actually calculated for each employee and stored in their payroll transactions. Since each pay day, the individual transactions are rounded using the 5/4 financial rounding method. So this is what you deducted each pay day from the employees.

The 941 form takes the total taxable pay (lump sum) for all employees and multiplies it by the FICA and Medicare rates which will then give you the tax not taking account for what I described above which should then be reflected in the fraction of cents line to settle up what you owe.

[MCressy]

What I don't understand is why if I add Jan and Feb's MTD together, the QTD amount is off?

Said another way:

Jan's Employer Liability was $400.89 and the QTD was $400.89.
Feb's Employer Liability was $393.11 and the QTD was $794.01 (which is .01 off)

I mailed the IRS $393.11 for February, however the 941 printout on page two shows $393.12 paid.

Is this truly a software error? I can manually change the 2nd period month paid, and then manually make the needed changes......kind of defeats the purpose though.

Is there someplace else that I can pick up the correct number that will flow through to the 941 at the end of the quarter? I don't care about the cents....it's just the hassle of getting the report correct.

[Paul Mayer]

The FICA employer rate adds faction of cents. The problem goes like this if you add each day, it goes to $0.00511111. if you add all in total without rounding, it goes to $0.00499999. that's the problem and we are trying to get around it when adding the Employer FICA since it is not a stored item like the employee FICA is.

[MCressy]

What is the best way for me to make my monthly 941 payment then? Should I just continue to accept the monthly employer amounts, and then manually check them when I file my quarterly 941 and make adjustments if needed?

[Paul Mayer]

This FAQ will answer why the rounding and that it is EXPECTED by the IRS since it is the method of taxing individuals.

http://zpay.com/vbulletin/showthread.php?3198-Rounding-of-Employee-FICA-and-Medicare-is-Expected