Taxing Matters: Decoding Your Quarterlies

Recently, Sentric decided to go green.

As a result, your Quarterly Reports are now being delivered electronically. While this doesn’t change anything about the format of the tax return copies included, we have changed the look of some of our in-house forms which provide additional information about your Quarterly process to be easier to read, more informative, and generally neater.

Rather than going through each page, I thought it might make more sense to provide a road map to understanding two of our most important summary forms included with your Quarterlies, the Autotax Reconciliation Report and your Autotax Memo.

First, the Autotax Reconciliation Report. This report is broken out into two sections and is designed to give you a summary of the tax amounts Sentric has paid on your behalf over the course of the quarter.

The upper section (Tax Liability and Deposit Summary) itemizes each tax your company is coded to remit within our software for which liability is currently due. This includes Federal, State, and Local Taxes (where applicable). If you are confused by our acronyms, please note that SITW is in reference to State Withholding Taxes and SUI references State Unemployment Taxes. The Liability column shows the amount of tax due based on our software’s calculation, while the Deposits column indicates the amount being paid by Sentric on your behalf to the noted agency. Lastly, the Variance column shows the difference between Liabilities and Deposits. Calculations can often result in small variances, usually $0.05 or less. Have no fear. This is usually due to rounding calculations of fractions of cents. Tax agencies have a threshold for any variance and will be forgiving of a few pennies should things be slightly off.

The lower section (Tax Impounds) shows a schedule of taxes impounded for payment with each of your company’s check dates. This is used to present a summary of when the amounts shown in the upper section were swept for payment to the tax agencies. In connection with this section is the Tax Liabilities Not Impounded by Sentric section. This remains blank a majority of the time and is used mainly to show transparency and assure you that all tax liabilities are accounted for and will be paid on your behalf.

The other important document to note is what is referred to as the Autotax Memo.

The first thing you should understand about this document is that you may not receive one each quarter. In fact, this document only appears as part of your quarterly if a change of any liability amount is required, positive or negative

As you’ve probably guessed by now, its purpose is to indicate any adjustment to your tax payments made as the result of a number of factors occurring within the quarter. It can indicate both increases and decreases in liability (the amount you owe) due to agency credits, rounding amounts, or mainly, changes in your State Unemployment Tax rates.

Rather than calculate differences as the result of change immediately, our software handles this task at the end of the quarter and either debits or refunds your account accordingly based on calculations made retroactively to the beginning of the quarter. In other words, if your SUI rate is adjusted in the middle of a quarter, the software will make sure you are paying only what is due – nothing more, nothing less.

To help you understand what exactly this document is showing, I’ve included a sample page in the above graphic. This particular example shows a client with an increase for one tax code (OHSUI) and a decrease for another (MTSUI). The text of these items is shown in ORANGE. This is to visually indicate that the business has an overall balance due and to alert them that we will be sweeping the funds on the date indicated. It will also indicate the last four numbers of the bank account which will bear this activity.

If the information on the notice is shown in BLUE, then you will be receiving a refund to your account, likely corresponding to a decreased Unemployment Tax Rate.

Again, only those who have a change of any liability amount, positive or negative, will receive this document.

Although these documents may appear intimidating and confusing at first glance, they really are pretty easy to follow. However, if you ever have any tax questions please reach out to your Sentric representative.


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