Help with Employer made payroll tax deductions ... I am representing the employer.?

First a little background info: Okay, so until early this year, I always did the company payroll, taxes, filings, etc. I've never had significant problems or errors, at least nothing I couldn't figure out and fix. My position has been filled by someone else and I've moved up in the company.
This year I've been called in to assist the new person in filing the 941, 940, and SUTA taxes. As well as assisting with the w-2's and w-3. In attempting to train this person on filing all of these, I've found extensive errors in the deductions from weekly paychecks for several employees. These errors are of course causing the quarter (and the year) to fail to balance. The errors specifically are for social security and medicare deductions. Some employees overall overpaid and some underpaid leaving it all in a mess. What is the legal way to correct such mistakes? Can anyone link me to information on handling such a problem? I can't go to our accountant b/c the new person is the owners wife. "Sticky"

You better go to your accountant and NOW before this turns into a tax nightmare with heavy fines. You are out of your league handling such errors.

I would immediately pay everyone who was underpaid or overwithheld.

Then I would gross up the other checks and consider that your correct payroll (there isn't much you can do about the people who were overpaid).

Then I would file corrected forms and pay the appropriate taxes. If you receive notices, you can ask for any penalties or interest to be waived by explaining that there were numerous clerical errors, but all the taxes have to be paid first.

I would inform all the appropriate people of what's going on -- there is absolutely no reason you should cover up for anybody.

You don't have a choice except to go to the accountant to get all of those errors fixed. You will have some pretty ticked off employees when you let them know that corrections need to be made to their payroll checks.

If you don't nip this problem now, it will only get worse.

Hi,

Sounds like your trying to reconcile 2007. Since the year is closed you can't really pay anyone anymore for 2007.

You can re-class wages before you file.

I have heard of the old trick of reclassifying wages from fed tax to ss tax but technically that is not appropriate.

If they paid to much then re-class the overpaid ss tax into another deduction type for 2007 and then refund that deduction in 2008. The opposite is true if they underpaid but the most important thing to remember is that SS tax withheld must match SS wages.

Good luck

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