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Level 4

Simple IRA contributions

I just set up a Simple IRA for my 2 employees and myself. I transferred funds to American Funds, the company that manages our retirement account, but I am unsure how to separate the employee contribution vs employer contribution. Please any suggestions would help.

13 Comments 13
QuickBooks Team

Simple IRA contributions

Allow me to share a few information about contributions in QuickBooks Online Payroll (QBOP), stephengroeschel.


When setting up a contribution for your employees, you'll have the option to set up a company-paid contribution separately. I've attached this screenshot for your guide: 

company paid.PNG

To set this up, follow the steps below:

  1. Select Workers, then select Employees.
  2. Select the employee's name.
  3. Select the pencil icon in the Pay section. Scroll down on the deductions section. Then select +Add deductions.
  4. Select Retirement Plans under Deduction/Contribution type. Then select the type of Retirement plan
  5. Enter the name of the provider. And the amounts per pay period.


Then, pull up the Payroll Summary report to double-check the employee/employer deduction information. Here's how:

  1. Go to the Reports menu.
  2. Use the Find report by name search bar to search for reports by name. You can also browse the list.
  3. Select the report to open it.

However, if you have created items for your employer contribution and another one for your employee, you can separate the account on the Accounting Preference page. 


I've added this article to the list of reports available in QBO: Run Payroll Reports. Additionally, you can also customize a report to get the information you need. Please check out this article: Customize Reports In QuickBooks Online.


Fill me in if you have any concerns about IRA contributions. I'll be right here to help.

Level 4

Simple IRA contributions

That was very helpful thank you so much! 

One more question...when the money comes out of my bank account and goes to the American Funds IRA company, how do I record that? It ends up in my Transactions-Banking as a transaction that needs to be matched. I am not sure how to categorize this? It is the employee deductions+employer contributions combined together in one payment. 

QuickBooks Team

Simple IRA contributions

Thanks for the follow-up question, @DIETRYING. I'll be your guide today in recording your transactions in QBO. 


You can match the banking transactions with your existing ones with the employee and employer deductions to avoid getting duplicates. 


Here's how: 


  1. Find a downloaded transaction with the Match option in the Action column.
  2. Note the DateDescriptionPayee, and amount spent or received.
  3. Select the downloaded transaction to expand the view, then review the Matching records found in QuickBooks. 
  4. Select the link next to each match to get more details.
  5. Make sure this is the correct match. In particular, review the Deposit toPayment method, and Bank account fields on forms for the existing transaction in QuickBooks.
  6. If this is the correct match, close the open transaction.
  7. Select Match.


For further insights into this process, check out this article: Categorize and match online bank transactions in QuickBooks Online.


To make sure your transactions are categorized to the correct account, I'd recommend consulting an accountant. 


Come again if you have additional concerns. We're always around to help.





Level 4

Simple IRA contributions

Thank you but I know how to match transactions. My question is how do I split the transaction into the employee contribution vs employee deduction? They are both combined together in one lump sum when transferred to American Funds.

QuickBooks Team

Simple IRA contributions

Hi there, stephengroeschel.


I appreciate you for coming back to the thread to add clarification about your concern. With this, I'll share steps to ensure you'll be able to split the transaction into the employee contribution vs employee deduction.


To start with, I suggest making sure that you create an account for contribution and deduction by going to the Chart of accounts. This allows you to divide the entries into different categories with various employees.


Once done, you can follow the steps below on how to split your downloaded transaction. 


  1. Go to Banking. Then, choose Banking.
  2. Highlight specific account.
  3. Select the transaction you want to split the amount.
  4. Click the Split button. 
  5. In the Split transaction window, choose the category and then enter the Amount.
  6. Click Apply and accept


You can refer to this article to see additional details: Categorize and match online bank transactions in QuickBooks Online.


Please refer to this article to view steps on how you can reconcile your accounts so they match your bank and credit card statements to avoid discrepancies: Reconcile an account in QuickBooks Online.


Let me know if there's anything else you need help with. Know that I'm always here to help you anytime. Take care and keep safe!

Level 1

Simple IRA contributions

Hello ! Were you able to send funds to American funds electronically through quickbooks ? I am trying to this exact same thing and just started with American funds. How has this been working for you and what is the most productive way to process ?


I have set up the employee deduction amount with company contribution percentage under each employee in payroll. How do I send the funds and where do I find the total amount that needs to be sent ?

QuickBooks Team

Simple IRA contributions

Hi there, jelseth1986. 


I'll make sure you'll be able to send the fund and find the total amount in QuickBooks Online (QBO). 


In QuickBooks, once you set up a retirement plan deduction, it'll be reported on your payroll tax forms. By the time you create and run payroll, the retirement amount will show in their paychecks. 


For additional resources, check out the Retirement plan deductions/contributions article. It provides an overview of how to assign the payroll item to employees and steps to apply the deduction/contribution. 


Please don't hesitate to leave a comment below if you have additional questions about paying deductions. It's always my pleasure to help you. 

Level 1

Simple IRA contributions

How do you set up the owner of the company  for the simple ira?

QuickBooks Team

Simple IRA contributions

Let me share some details about setting up a Simple IRA in QuickBooks Online (QBO), drbarnhoorn.


In QBO, when you hold the position of a company owner, there's no need to establish a Simple IRA through the payroll system. Instead, you can manually generate a check for the Simple IRA account.


Here's how:


  1. Go to the +New button.
  2. Under Vendors, select Check.
  3. Enter the information needed in the window.
  4. Hit Save and close.


I've included the following articles for your reference in managing retirement plans in QuickBooks Online: 



The Community is open 24/7, so you're never alone in your journey to effectively manage payroll and vendor transactions. Have a good one!

Level 1

Simple IRA contributions

This is helpful for if I make a check from the company to the owner's IRA account.  Can someone guide me to which category in the COA the IRA contribution goes into?  Is it an expense?

Level 1

Simple IRA contributions

I'm no expert being new to this myself, I have them entered under Payroll Liabilities.

Level 1

Simple IRA contributions

I am wondering the same thing. Did you ever figure this out?


Simple IRA contributions

Hi DJRich,


I see there are many questions in this thread. Let me address yours.


If you're asking about the specific category for IRA contributions, I'm unable to provide an answer. Your accountant is the best person to assist you with this.


If you're asking about separating the contribution for the employer and employee side, you can refer to my colleague's response above.


Feel free to go back to this thread if you have other questions in mind. Take care and have  good one.

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