Client's bookkeeper has asked me for help in recording the value of the personal use of the corporation's auto. I don't do payroll (not even my own) and I don't know QB very well.
The value of the fringe is $14,000. FICA and Medicare are the only relevant taxes; there is no income tax withholding.
She said that QB is creating a liability on the corporation's balance sheet. I said that I thought that there would be a liability = the corporation's share of FICA and Medicare on the value of the fringe benefit + FICA and Medicare withheld from the employee's paycheck. Is that correct? Is there any other liability that QB would create?
How is the $14,000 treated on the corporation's income statement? It seems to me that it would be excluded from officer's compensation since it is a noncash item and all of the costs of operating the auto are included in the income statement. Am I correct that the $14,000 is a reconciling item between the W-2 and the income statement?
If you have specific steps or information on how to do this, we are listening....
Thanks for any help.