How To Set Up Health Insurance Deduction In QuickBooks Desktop

The QuickBooks software allows you to set the deductions related to the health insurance contribution and they get updated automatically in the insurance plan of the employee.

Issues Faced By User While Setting Up Health Insurance Deduction In QuickBooks Desktop

  • The user is not able to set up the insurance benefit item of payroll for the insurance.
  • The user faces issues while setting up the health insurance deduction in payroll.

To solve these issues, you can follow the steps given below:

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To Set up the contributions of a company to an employee’s health insurance in QuickBooks Desktop

Follow the steps given below:

  • First of all launch your QuickBooks desktop software.
  • Then tap on the employees tab.
  • Next, you need to tap on the name of the employee and right-click on it to choose the edit command.
  • Now move to the Deduction section and see look for the pencil icon there as soon as you find the pencil icon tap on it and do the changes in deductions.
  • Also, you can tap on the Add new deduction button if you want to add the deductions for that employee.
  • Now tap on the deduction drop-down list and choose the new deduction option.
  • After that choose the health insurance option you can select the type of insurance from the drop-down list like Dental insurance, Medical insurance, etc.
  • Then type in the information like the name of the health insurance provider.
  • Further, choose the percentage of the gross income or the amount, you can also change the amount while creating the paychecks.
  • Once you have done all this now you can choose how the premium is taxed.

Note: You should always select the type of premium according to the plan documents you have.

How To Set up Insurance Benefit Item With The Help Of Custom Setup:

  • Firstly open your QuickBooks software and go to the list menu
  • Then select the payroll item list and from there tap on the payroll item button.
  • Next, choose the new button.
  • Now choose the custom setup tab and click on the Next button.
  • Then you need to select the deduction option and again tap on the Next button.
  • After that assign the name to the deduction item the payroll report will show the name that has been assigned by you.
  • Next, you need to type in the account number and the name of the agency and click on the Next button.
  • Now tap on the tax tracking type drop-down list and choose the option for classification of tax and click on the Next button.
  • Now go to the taxes window and make sure you do not alter anything in the taxes and then tap on the Next button.
  • After that go to the “Calculated Based on Quantity window” and choose neither option.
    • Note: You should type in the default rate when the same money is paid by each employee for the health insurance.
  • At last click on the Finish button.

Read This: How To Adjust Payroll Liabilities In QuickBooks?

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  1. How to enter a deduction in your QuickBooks account?

    For adding the new deductions

    ? In the deduction section, click on the + sign to add a new deduction
    ? Click on the drop-down menu of deduction/contribution 
    ? Then select the new contribution or deduction
    ? You have to choose the type of deduction from the drop-down icon
    ? Mention the name of the provider 
    ? Select the amount or the gross pay
    ? Then click on the Done button.

  2. How to edit a deduction that already exists?

    ? Under the option “Does this employee have any deductions”
    ? You have to click on the Edit option that is shown in front of the deduction that you want to edit
    ? Now, do all the changes that are required
    ? Click on the OK button and then click on the Done.

  3. What are the deduction options for the insurance plan?

    There are 2 options that you have to select the option mentioned in your documents. These options are:-

    ? Taxable insurance premium
    ? Pre-tax insurance premium.



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