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Experienced Member

401K contribution

How do you post a transaction for 401K contributions that were made after a year end but before tax return deadline next year?  Say you made a $1,000 contribution in February of 2019 but wants to post it as 2018 contribution.

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Best answer 11-29-2018

Accepted Solutions
Established Community Backer ***

Re: 401K contribution

You took a Draw, the same as any taking from business bank for personal use. This value is reported on the 1040 and not the 1065 or Sched C. There is nothing to do about "2018 in 2019" for this taking. You reported it on 1040 for 2018, and Funded it from a draw from the business.

 

And you should confirm with your own CPA that you qualify for a "Solo 401(k)" plan and that is the forms you filed at that bank. See this topic:

https://www.irs.gov/retirement-plans/one-participant-401k-plans

8 Comments
QuickBooks Team

Re: 401K contribution

Hello there, KSM1.

 

I'm glad to see you in the QuickBooks Community. I'd be delighted to share some information about posting a transaction for the 401 (k) contributions.

 

To report the contribution amount for the current year filing, you need to choose 2018 as the paycheck date of the payroll. For any transactions made in the year 2019, you may need to report them manually to the agency.

 

For more in-depth information about 401 (k) Plan, you visit the link below:

 

401(k) Plan Overview

 

Just in case you need help from our Phone Support Team, you can also reach out to them through this support link:

 

Get help with QuickBooks Online

 

The Community team is always here to answer any questions that you may have. Feel free to let us know by leaving a comment below.
 

Established Community Backer ***

Re: 401K contribution

For Employer Match expense: The Employer would be posting the expense as offset to Liability, for purposes of the 2018 tax return for the business. Then, the Banking happens in 2019, to pay out that liability.

 

You cannot do this for employee deduction in the Wrong year. That isn't possible, by definition of "from paycheck" dates. The employee deduction is on a dated check, held as a liability to pay out later. You cannot deduct from 2019 payroll and call it a 2018 deduction.

Experienced Member

Re: 401K contribution

Thank you very much for taking time to answer my question.

We don't have an employee and no pay checks involved here.  We have set up a company 401K a few years ago and have been putting money in.  I know we can make a contribution by April 2019 and deduct from 2018 tax return according to our CPA.  Just never did this in the past, so I'd like to know how to do it on Quickbooks.

Established Community Backer ***

Re: 401K contribution

"We don't have an employee"

 

Then you are asking about Solo 401(k)? Is this a Corporation? Or, SEP?

 

I recommend you ask your own CPA about this. Your terminology of "401(k)" and not having an employee, is a bit confusing.

Experienced Member

Re: 401K contribution

Sorry for the confusion.  We have our own company that is LLC.  It's my husband and I with no other employees.  So we had a financial institution set up 401K accounts for us a few years ago.  We don't have a set payroll, just take it as "owner's withdraw" here and there.  Also put money into 401K when we can.  We were told we could contribute in 2019 before April and put it on 2018 tax return.  Just wondered how we post it on Quickbooks.

Established Community Backer ***

Re: 401K contribution

You took a Draw, the same as any taking from business bank for personal use. This value is reported on the 1040 and not the 1065 or Sched C. There is nothing to do about "2018 in 2019" for this taking. You reported it on 1040 for 2018, and Funded it from a draw from the business.

 

And you should confirm with your own CPA that you qualify for a "Solo 401(k)" plan and that is the forms you filed at that bank. See this topic:

https://www.irs.gov/retirement-plans/one-participant-401k-plans

Experienced Member

Re: 401K contribution

So we have a husband/wife partnership passthrough LLC, we are taking w2 from this LLC, We open a 401k Solo account in Dec 2018 so to establish 401k in 2018. Now we know that we can do deduction and contribution (18500 + 25% of compensation @ maximum of 58000 approx) prior to the tax deadline. My question is 1) Can we deposit only employer contribution to 401k or we have to have deposit our deduction to have the contribution. 2) How to record this contribution in QBO so to have this expense out.  I know because this is passthrough I can Draw and report this directly to 1040. Now 2018 has gone can we do some adjustment to record employer contribution. Thanks for all the help. 

Established Community Backer ***

Re: 401K contribution

@omairi

 

You cannot take Payroll for the LLC members unless the LLC has elected to be treated as a Corporation.

 

Payroll deductions that are the employee's contribution Must Be Put into the 401(k) account. That is the fiduciary responsibility of the Employer that withheld or deducted from the employees. That is the Employees' money and the employer cannot keep it; that would be Theft.

 

For "employer only" you seem to be referring to a nonelective component.

 

And your question of Expense is complicated by the condition of "payroll for the LLC members." In general, the Employee's deduction is already in the employers Gross Wage expense. The Employee contribution isn't expense when you Send it in. You already have taken it from the employee and that is the same as paying Taxes, which is Liability, not expense, for purposes of understanding Cash Flow.