QuickBooks Payroll may not be deducting taxes from employee paychecks because of outdated software, improper employee setup, or missing tax data. If this problem is not resolved right away, it may result in hefty penalties and compliance issues. Review each employee's tax setup, make sure their filing status and exemptions are proper, and confirm that the federal and state tax tables are current in order to update it. Additionally, confirm that all payroll items are assigned appropriately and that QuickBooks Payroll is activated correctly. You can avoid these mistakes and maintain the seamless operation of your payroll by routinely updating the software and syncing your company file.