Toast Payroll: Read Your Quarterly Tax Package

In this Article:

• Quarterly Tax Package Basics
• Review and Verify Your Quarterly Tax Package
  • Summary
  • Reconciliation Recap (Variances)
  • Review Tax Returns/Filings
  • Company Tax File
• Additional Resources

Quarterly Tax Package Basics

A quarterly tax package is a set of documents that contain all tax documents and returns filed with state and federal tax agencies on your behalf by Toast Payroll. Federal forms 940, 941, and (when appropriate) 944 can be found in the quarterly tax package. When a tax package is available, an notification email is sent out to the last individual who submitted payroll. Quarterly tax packages are typically available the third full week of the month following quarter-end.

You can locate your most recent quarterly tax package in the Tax Center around three weeks after the end of each quarter. Navigate to Taxes and select the tax package download button. Visit Toast Payroll: Manage Payroll Taxes for more information about the Tax Center.

Otherwise, you can always find all your historical quarterly tax packages by navigating to Reports > Tax Filing. First, use the Year and FEIN drop-down menus, then select the blue arrow button to view and download the files.

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Review and Verify Your Quarterly Tax Package

Toast recommends four steps when reviewing your quarterly tax package:

1. Summary
2. Reconciliation Recap and Variances
3. Review Tax Returns/Filings
4. Company Tax File (this includes a red flag on filing issues)

Step 1 - Summary Page

The first page provides a glossary of tax activity terms for the quarter. Review the description in the center of this page. The figures on the following pages are indicators of over/underpayments which may have caused variances that will be credited or debited from your bank account.

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Step 2 - Reconciliation Recap and Variances

Your overall tax variance can be found in the top right-hand corner of the second page of the quarterly tax package. All tax variances (credits or debits) will hit your account mid-month (roughly between the 19th and 25th) that follows the end of the quarter.

If no additional cash is needed, you will see this:

For informational purposes only
 

If additional cash is needed, the amount shown will be debited from your account:

For informational purposes only
 

The bottom half of the page is a reconciliation of the amount of taxes you owed to the amounts withheld and remitted to the federal and state tax agencies.

• The Liability column shows what is due based on wages and tax rates for those taxes.
• The Deposits column shows the amount of funds that were collected during the quarter through payroll to be remitted to the agencies.
• The Prior Adjustment column shows any credits or outstanding balances for the associated tax.
• The Variance column shows the difference between the Liability, Deposits, and Prior Adjustment columns.
• The Deposit Type describes how the variance will be included in the overall quarterly tax variance (a credit to your bank account or a debit to your bank account).

For informational purposes only

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Step 3 - Review Tax Returns/Filings

The pages following the Reconciliation Recap section are copies of all of the tax returns and tax filings for the quarter in alphabetical order by state. The federal returns precede the state returns and these documents make up a majority of your tax package. These are stored in Toast Payroll, but it is recommended that you download these for your own records. If you use an accountant, they may need these documents.

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Step 4 - Company Tax File

It is very important to review this section to ensure that your filings have gone through and that information in certain columns is correct. If not, it could result in penalties or interest charges from tax agencies. To review this, scroll to the very last document in your quarterly tax package.

1. Information in the Employee Identification Number (EIN) column is very important as it provides a red flag around filing. If there is an Applied For message in this column, Toast was unable to successfully file a particular tax.
   1. If you've already received your EIN, ​​​​add it to your Tax Accounts page.
   2. If you have not yet received your EIN, use these links to locate it and add it to the Tax Account page.
   3. Once it's been added, request a "quarter end exception" from us by selecting the blue chat dot in the lower-right corner of any Toast Payroll page. Include details about the quarter(s) affected and what account was in an Applied For status.
      
       
      For informational purposes only
       
2. Review the Rate (%) column and verify the rates are correct. The links in these charts may provide assistance on locating your rates. If they are not correct, navigate to Settings > Payroll > Tax Accounts and edit the appropriate rate.
3. Review the Frequency column. This represents the frequency in which Toast Payroll remits withholding taxes to tax agencies. If it is not correct, navigate to Settings > Payroll > Tax Accounts to edit the payment frequency.

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Additional Resources

• Toast Payroll: Year-End Checklist
• Toast Payroll: State Tax Account Numbers
• Toast Payroll: Registration Chart by State
• Toast Payroll: Example State Withholding and UI Correspondence
• Toast Payroll: Register for State Tax Accounts
• Toast Payroll: Tax Resource Center