Repayment of 401K Loan from owner

rbelden · ‎December 11, 2019

Our CEO used her 401K loan to fund operations. I offset the checking deposit to an account used to track what the company owes her. Next I setup a payroll item (QB Desktop) for the deduction to track and pay the liability back to the 401K account but if she decides to not take a paycheck this week I am unable to determine a GAAP to account for the payment. In addition the loan balance is not getting updated of course because paychecks do not affect that account. I feel that my approach is way off course. Any advise would be appreciated.

JonpriL · ‎December 11, 2019

Hello @rbelden,

You're on the right track in setting up a payroll item and creating a paycheck to pay your 401K loan but I'd recommend contacting your accountant. He/she can help and guide you in properly recording your 401K loan repayment.

For more insights, here's an article you can read to learn more about how to track the repayment of your 401K loan: Deduct 401(k) Loan Repayment from a Paycheck.

Please let me know in the comment section down below if you have any other concerns. I'll be always around ready to help.

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