overtime never paid.

Any non-Tax accounting topics go here.
#1
juro  
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My client does not pay overtime. Instead, it pays straight rate for all hours over forty per week.
And this is called "reimbursements" on the Payroll Summary which is prepared by SurePayroll.

How to classify this on the chart of accounts? I can't just call it "reimbursements." total of $51k for the year to date.

My Salary & Wage expense balance agrees with the forms 941. But the "reimbursements" are not included. Also not included are the normal employee reimbursements such as travel and expenses. Right now i have dumped these "reimbursements" into Uncategorized Expenses.
 

#2
jon  
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Salaries
 

#3
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These amounts you describe are payroll, which aren't properly being treated as payroll. Your client has underreported and underpaid their payroll taxes by about $8K in 2019.
Don't for a moment feel like "prepared by SurePayroll" is any kind of defense against how improperly this is being handled.
~Captcook
 

#4
CathysTaxes  
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And one day your client will be reported and pay dearly.
Cathy
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#5
sjrcpa  
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And SurePay processed it that way because they were told to do so.
 

#6
CathysTaxes  
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I don't know about that. I had a client that I did payroll for who didn't pay time and a half. I stopped doing payroll and he went with ADP and is now stuck paying time and a half.
Cathy
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#7
juro  
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Thanks for the responses.

Today we just had a meeting about this issue. We need to decide how to correct the problem for the year 2019. Do we amend all payroll returns for the year? or can we just report this reimbursements on forms 1099 for each employee?

Right now I am close to finishing my report on how much reimbursement is actually OT pay for each employee. My client has several dozen employees, so it was big job.
 

#8
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They are wages...reporting on a 1099 is incorrect.

The options are whether to report all these wages as though they were paid in 4Q or on the dates they were actually paid.
For practical purposes, I would report them all in 4Q. It will help to minimize the penalties and remove the need to amend prior quarter reports.
~Captcook
 

#9
juro  
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SurePayroll wants $2k or $49 per employee, just to process the change.
 

#10
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What would you charge the client?
The more important dynamic is to get the payroll tax deposit made right away.
~Captcook
 

#11
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While I would consider reporting all in the fourth quarter, consideration of the preparer penalties should be noted. Since I am adverse to paying preparer penalties, I would prepare all the federal and state payroll reports correctly by period, and let the client pay.

Surepayroll may prepare the reports, but someone along the line must sign them.
 


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