After entering the standard deductions, the system needs to know the codes used for certain types of deductions. These codes are used in preparing various tax reports. Not all the standard deduction codes need to be entered here. Only enter the codes of the deductions you wish to be included on the 941 and the W2 reports. The screen used to enter these codes consists of three different forms.
Select Standard Deduction Names from the Select, Payroll menu. The screen appears as follows:
This first form is used to enter income tax (federal, state, and local withholding taxes) deduction codes. The deduction code must have been previously entered into the Standard Deductions file. After you have entered a valid deduction code in the Code field, the description of the deduction as it is stored in the Standard Deductions file is displayed in the Description field.
Following our suggested deduction codes, you would need to make the following entries:
Code Description Type
fwhs Federal Withholding-Single f
fwhm Federal Withholding-Married f
swhs State Withholding-Single s
swhm State Withholding-Married s
To add a record, press the ADD <F6> button. Type in the tax code and type (i.e f, s, or l). Store the record by pressing the STORE <F5> button. Repeat this process for each tax deduction. When you have added all the income tax deduction codes, press the NEXT <F7> button to display the next form.
This form is used for entering social security tax codes. On any of the forms it is possible to use the same code for more than one deduction if that is the way it has been set up in the Standard Deductions file. For example, a deduction code of fica could be used both for the employee fica tax and the employer fica tax. Our sample entry assumes that there is a single record set up for both employer and employee fica.
Code Description Type
fica Social Security Tax f
Add the social security tax deduction codes in the same manner as you added the codes in the previous form. If you have separate codes for employee and employer deductions, both of these codes need to be entered. When you are finished, press the NEXT <F7> button to display the next form.
This form is used for entering unemployment tax deduction codes. It works in the same manner as the two previous forms. Suggested entries are:
Code Description Type
futa Federal Unemployment Tax f
suta State Unemployment Tax s
luta Local Unemployment Tax l
The remainder of the setup procedures are run from the Payroll Menu.