Offsetting a payroll tax refund entry

[Conspiracy theorist]

Hello all, so an employee overpaid city taxes after a rate change, and ADP issued the refund through payroll. That transaction left a debit in our Loans Receivable account, which I now need to clear before year-end. What's the proper offset account I should use to remove this balance and make sure everything is recorded correctly in the books?

 

[Hanty louis]

Offset that debit in loans eceivable with a payroll related clearing account or an expense account, depending on how your books are set up. Some people use a payroll clearing or other receivable/payable account to zero it out. Definitely make sure it ties back to the original payroll transaction so your year end reconciles cleanly

 

[Conspiracy theorist]

So I'll trace it back through payroll and clear it with the right offset, probably a payroll clearing account. That way everything ties out neatly for year-end. Thanks for the guidance