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Solo 401K - post to QB Online

The owners started a Solo 401K for 2018 and contributed $10,000 each through payroll, we use a separate payroll company to do payroll for the owners, there are no employees.  I need to record this in QB Online.  The banking gets downloaded into QB and I usually take the net checks and split them Salary and Wages and payroll liabilities.  Then the taxes come through and split that to Liabilities and tax expense.  I have not set up anything for showing the 401K contributions and need to record checks showing 401K in QB Online.  Can someone help me with what I need to do.  All I need to do is record the checks correctly in QB Online again showing the 401K contributions.  Please help!

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Best answer 01-01-2019

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Established Community Backer ***

Re: Solo 401K - post to QB Online

The Tax entity type covers this.

Sole Proprietorship or LLC not electing to be treated as a Corporation = No Payroll Permitted for the "owners/members/partners." They take Draws from Equity.

 

LLC filing to be treated as a Corporation, an S Corp or a C Corp = everyone is an employee; there are no Owners. Everyone is paid through payroll.

 

This would be wrong for the Timing: "The banking gets downloaded into QB and I usually take the net checks and split them Salary and Wages and payroll liabilities.  Then the taxes come through and split that to Liabilities and tax expense"

 

Payroll math for the one pay date:

Gross Wages + employer share of taxes = Expense

 

Then, Employee share + Employer share are held in Liability.

 

The Banking date for paying liability is Never the expense.

 

"I have not set up anything for showing the 401K contributions"

 

That is another missing piece of Gross Wages and should have been part of the Gross for each paydate that had withholding, the same as a tax event.

 

And if there was not supposed to be payroll, you have time to reverse and amend and correct all of this. Then, the 401(k) funds are Draw.

 

2 Comments
Established Community Backer ***

Re: Solo 401K - post to QB Online

The Tax entity type covers this.

Sole Proprietorship or LLC not electing to be treated as a Corporation = No Payroll Permitted for the "owners/members/partners." They take Draws from Equity.

 

LLC filing to be treated as a Corporation, an S Corp or a C Corp = everyone is an employee; there are no Owners. Everyone is paid through payroll.

 

This would be wrong for the Timing: "The banking gets downloaded into QB and I usually take the net checks and split them Salary and Wages and payroll liabilities.  Then the taxes come through and split that to Liabilities and tax expense"

 

Payroll math for the one pay date:

Gross Wages + employer share of taxes = Expense

 

Then, Employee share + Employer share are held in Liability.

 

The Banking date for paying liability is Never the expense.

 

"I have not set up anything for showing the 401K contributions"

 

That is another missing piece of Gross Wages and should have been part of the Gross for each paydate that had withholding, the same as a tax event.

 

And if there was not supposed to be payroll, you have time to reverse and amend and correct all of this. Then, the 401(k) funds are Draw.

 

Experienced Member

Re: Solo 401K - post to QB Online

I have an LLC taxed as S corp. 2 Members who are shareholders / Officers and one additional officer receiving compensation via 1099. No employees, no payroll. 

Solo 401k just set up as all officers are family members.

What is the best and most accurate way to set up the accounts for showing amounts contributed to the 401k  by the Biz for Officers and the Officers themselves?