Mark Wiley wrote:

- quote -

Just for the record, is this a financial statement or a tax
return you're preparing? The rules may differ...!

When the labor has been performed, the cost is accruable and
the related liability, whatever it is, is on - should be on
- should be put on - the books. The gross payroll expense
will *include* the withholding taxes, so they have already
been accounted for. The employer's share of payroll taxes
related to the hours of labor should also be accrued. For
the tax return, I would shy away from accruing the vacation
pay, since it won't be paid within the 2-1/2 month period as
required by IRC section *** [or is it in the regulations?
it's been too long].

And according to yesterday morning's newspaper there's now -
no, strike that, it's beginning next year sometime - a
financial statement accrual required for the underfunded
future pension cost of publicly traded companies!!! Betcha
buck or two that's not a tax deduction!!!

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Mark Wiley wrote:

- quote -

The employer's portion of FICA and Medicare are certainly
expenses. If they are material, they should be accrued with
the related wages.

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Mark Wiley wrote:

- quote -

well those "agency" accounts, which many refer to as "trust
fund" accounts, are going to be whatever balance they are
as of 2/28, so nothing to do with accruals since they are
not expenses.

ChEAr$,
Harlan Lunsford, EA n LA

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== > From: veg_all[at]yahoo.com
Subject: Are self-learning books on business deductible?
Newsgroups: misc.taxes.moderated
Approved: rdadams[at]smart.net
Precedence: first-class
Organization: http://groups.google.com

I like to buy lots of books by entrepreneurs, CEOs, and
others on business related topics. These books contribute
indirectly to knowledge applied to run my business. Is the
cost for them deductible?

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Mark Wiley wrote:

- quote -

Well, you can't accrue it separately from the accrued wages.
Technically I suppose you could do it thus:

Debit salary expense $10,000

Credit
Salaries payable $ 9,000
Withholding payable 1,000

You couldn't credit the whole $10,000 to salaries payable,
although that's really what it is, and then credit the
withholding to "withholding payable" -- because where would
you put the debit? As you said, it's not an expense to you.

I'm not an accounting expert by any means, but it doesn't
make sense to me to accrue the withholding. What you owe is
salary to the employee. You don't owe anything to the
government until you pay the salary.

Katie in San Diego

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"Mark Wiley" <markwiley[at]nycap.rr.com> wrote
- quote -

If you've already paid the salary, but the tax deposit is
not due until March 15th let's say, then a liability should
be on the books. You should also accrue the matching FICA
tax, FUTA and any state unemployment, and other payroll
related accruals.

If you are operating on the accrual basis for reporting,
then it's quite common to accrue the unpaid hours worked as
salary (gross is sufficient), and the related taxes (the
employer portion), and any other related payroll based
expenses. There wouldn't be any point of breaking up the
"salary payable" into the net portion and the tax
withholding portion though.

It's quite common to also accrue in the vacation pay earned
for those hours worked in February that won't be paid for
months down the road.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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I have a question:

When doing accruals for a corporate year end of February do
you need to accrue withholding P/R taxes? I know to accrue
the unemploymnent amounts, but I was taught that the W/H
accounts are whats called an "agency" account(Since you are
acting as an agent for the governing body you are not
expensing these items and therefore should not be accruing
them. Can anyone clarify this for me?

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