Sage 100

v4.5. - Client didn't install their 2014 TTU's until 3/31. Unfortunately, this was after they paid a bonus check that exceeded the annual Medicare limit. The issue is noticed when I am demonstrating how Aatrix works and it throws the red flag. Any thought on how to fix situation? Edit the employee record for the this quarter and YTD by transferring money from FIT to Medicare? If this is done, is there a 941 table that has to be edited also? Not sure how Aatrix works exactly? Any other thoughts? Just fix the Aatrix w-2 spreadsheet? How then to fix the 941???

First, they should consult their tax professional unless that's you. Second, I've seen it fixed most often by juggling the withholding tax which doesn't get reported until W2 time and gives you some room to move the amounts. This may or may not have tax implications, your mileage may vary, objects in mirror are closer than they appear and all other customary cautions. I've been burned by wading into this fixes.

I agree with Wayne. My approach is to not try to correct the underlying tables in Sage 100. If you need to electronically file, I believe (since I actually don't do the work around here!) that you can edit returns on their face in Aatrix. Something I have always thought was a great feature. Fix the employee's W-2 first by correcting taxable wage amounts and the taxes they compute, keep the employee's total withholdings the same by reclassifying withholding taxes to cover changes in fica and medicare taxes. Run the adjustment through the W-3 and the 4th qtr 941 manually as well. Finally, make sure the sum of all 4 qtrs. 941's equals the W-3...otherwise, the client will get a letter from either IRS or SSA depending on the direction of the error. Tax professionals do need to be consulted unless your it. If the adjustment is significant, the executive involved could have safe harbor or tax planning issues because of the unexpected change in FIT. I DO NOT recommend keeping the FIT the same and the employer paying the difference unless that's is what the tax professional is wants or is willing to defend. Paying someone's withholding is a taxable event, and then you get into a never ending circular reference.