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How to Report W2 Income in QuickBooks

· 4 min read
Debits

Introduction​

Accurately reporting W2 income in QuickBooks is crucial for payroll management and tax compliance. This guide provides a detailed, step-by-step process to report W2 income in QuickBooks Desktop and QuickBooks Online.

Reporting W2 Income in QuickBooks Desktop​

Step 1: Set Up Payroll​

  1. Open QuickBooks Desktop: Launch QuickBooks and log in with your credentials.
  2. Go to Payroll Setup: Navigate to Employees > Payroll Setup.
  3. Follow Setup Wizard: Complete the payroll setup by entering company, employee, and tax information.

Step 2: Enter Employee Information​

  1. Add Employee: Go to Employees > Employee Center > New Employee.
  2. Enter Personal Details: Fill in the employee's personal information, including Social Security number and address.
  3. Enter Payroll Information: Input the employee's salary or hourly wage, tax withholding details, and other relevant payroll information.
  4. Save Employee: Click OK to save the employee information.

Step 3: Run Payroll​

  1. Go to Payroll Center: Navigate to Employees > Payroll Center.
  2. Create Paychecks: Click on Start Scheduled Payroll.
  3. Review and Enter Hours: Enter the hours worked for hourly employees and review salary details for salaried employees.
  4. Calculate Paychecks: Click Continue, review the payroll summary, and click Create Paychecks.

Step 4: Generate W2 Forms​

  1. Go to Payroll Tax Forms: Navigate to Employees > Payroll Tax Forms & W-2s > Process Payroll Forms.
  2. Select W2 Form: Choose Annual Form W-2/W-3 - Wage and Tax Statement.
  3. Enter Year: Select the year for which you are generating the W2 forms.
  4. Review and Print: Review the W2 forms for accuracy and click Print/E-file to print the forms or submit them electronically.

Reporting W2 Income in QuickBooks Online​

Step 1: Set Up Payroll​

  1. Open QuickBooks Online: Log in to QuickBooks Online with your credentials.
  2. Go to Payroll Setup: Navigate to Payroll > Overview > Get set up.
  3. Follow Setup Wizard: Complete the setup by entering your company's payroll details, including employee and tax information.

Step 2: Enter Employee Information​

  1. Add Employee: Go to Payroll > Employees > Add an employee.
  2. Enter Personal Details: Fill in the employee's personal information, such as name, Social Security number, and address.
  3. Enter Payroll Information: Input the employee's salary, tax withholding details, and other payroll information.
  4. Save Employee: Click Done to save the employee information.

Step 3: Run Payroll​

  1. Go to Run Payroll: Navigate to Payroll > Employees > Run payroll.
  2. Enter Hours and Review: Enter the hours worked for hourly employees and review salary details for salaried employees.
  3. Calculate Paychecks: Click Preview payroll, review the payroll summary, and then click Submit payroll.

Step 4: Generate W2 Forms​

  1. Go to Payroll Tax Forms: Navigate to Taxes > Payroll Tax > Filings.
  2. Select W2 Form: Choose Annual Forms > W-2, Copies A & D.
  3. Enter Year: Select the year for which you are generating the W2 forms.
  4. Review and Print: Review the W2 forms for accuracy and click Print to print the forms or submit them electronically.

Best Practices for Reporting W2 Income​

  • Regular Updates: Ensure all employee and payroll information is regularly updated.
  • Review for Accuracy: Double-check all details before finalizing and printing W2 forms.
  • Timely Submissions: Submit W2 forms to employees and the IRS by the January 31 deadline.
  • Consult Professionals: Consult with a tax professional to ensure compliance with all regulations.

Conclusion​

Reporting W2 income in QuickBooks is a straightforward process when following the proper steps. By setting up payroll, entering accurate employee information, running payroll efficiently, and generating W2 forms, you can ensure compliance and accurate reporting. Implementing best practices will further enhance your payroll management and tax reporting processes.