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May 19, 2020
Question

After setting up simple 401k in my payroll profile, and sending deposit for the year's contributions, what accounts/entries should be made for money paid to 401K vendor

  • May 19, 2020
  • 1 reply
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1 reply

john-pero
Level 12
May 19, 2020

Is this a combination of employee deductions and employer match? Shouldn't there have been created a payroll liability when you ran payroll? After each and every payroll you are obligated to submit the deduction and match - as far as I know from running a 401k for 3 years there is no such thing as waiting until year end to contribute (unless your plan allows that)

 

The deduction and contribution must be recorded through payroll for any of your employees.  If this is owner-only contribution (as an owner participant there is no regular contribution schedule, only annual max of $13,000) you record it as owner draw as it is not a business deduction but will be a deduction on your personal return against your pass through business income