I paid a penalty to the IRS, but it was there mistake, so they paid me back the money. I don't know how to categorize it. Can anyone help?

I'll be more than happy to assist you with your concern, vjohnson@lienonm.

You can create a bank deposit in QuickBooks Online to account for the reimbursement you received from the Internal Revenue Service. Make sure to post it to the expense account you use for tracking the tax penalty fee to offset the amount. I'll show you how:

1. Click the + New button.
2. Choose Bank Deposit.
3. Go to the Add funds to this deposit section.
4. Select IRS in the Received from column.
5. Enter the reimbursed amount and choose the appropriate expense category.
6. Add a memo as needed, then click Save and close.

For more tips and resources while working with your taxes and wrapping your payroll, feel free to visit this article: Year-end checklist for QuickBooks Online Payroll.

If you need more help in accomplishing your other tasks, please let me know by adding a comment below. I'll always have your back. Have a good one, vjohnson@lienonm!