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

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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.

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.

"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.

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.

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. 

@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.

I have the same question about the accounting / bookkeeping aspect of the solo 401k contribution.  What is the best way to set up quickbooks (online) to account for the solo 401k contributions.  I am a sole proprietorship LLC (not an S corp) like the couple with the prior question.  Therefore it's going to go on my personal taxes, but what I'm trying to figure out is the best way to bookkeep for contributions on quickbooks online (i.e. what account to pull from, or create a new one, etc.).  Any guidance would be much appreciated from someone who has done this before.  Thanks