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Level 1

Charter of accounts categories for 401K Journal Entry for 401K Contributions

As a solo small business owner and trustee to a new 401K for my three employees, I now need to add a journal entry into my QuickBooks. What should be the categories in my Charter of Accounts for the following: Plan Contribution, 401K Withheld, and Owner's Draw?  Are these all "Expenses"?  I am the bookkeeper of my business but only have rudimentary accounting skills.  Do you have a sample journal entry for a 401K?

Appreciative...VC

 

1 Comment
Community Champion

Charter of accounts categories for 401K Journal Entry for 401K Contributions

You will set up 2 new accounts in your chart of accounts through payroll setup. Going through setup you will set the % for employeecand % with or without cap for employer match. The employee portion is included in gross wage, the employer portion is an expense.

 

Owner Draw is never an expense. It is equity removal from the business 

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