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Hailstorm
Level 1

Categorizing 401K payments to Guideline

Hi,

 

I've got 3 employees and have just started offering 401Ks through QBs payroll and their partner, Guideline. We are not yet matching contributions. The first deductions were made from paychecks in the last payroll run. All good. I've just downloaded a bank transaction representing a payment of the employee 401K contributions to Guideline. I'm confused as to how to categorize it in QBs? Is it assigned to one of the payroll liability accounts?

 

Appreciate any help here...

THX

P

Solved
Best answer March 04, 2021

Best Answers
john-pero
Community Champion

Categorizing 401K payments to Guideline

All employee deductions are company liabilities so the payment is a payment of the liability. This liability is already recorded in QB since you use QB payroll. A couple of ways to approach this, if tge liability shows in QB Payroll as unpaid, pay it (record the money movement) and match to the bank feed transaction. Or , starting with the feed item search for a match to find either the unpaid liability or the payment transaction made by QB on your behalf. 

 

Planning ahead, you will add employee match as a separate payroll item, which, when running payroll, will also become a payroll liability.  All payroll costs, including taxes, are posted on the date of payroll as accrued, even if you use cash basisvreporting

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31 Comments 31
john-pero
Community Champion

Categorizing 401K payments to Guideline

All employee deductions are company liabilities so the payment is a payment of the liability. This liability is already recorded in QB since you use QB payroll. A couple of ways to approach this, if tge liability shows in QB Payroll as unpaid, pay it (record the money movement) and match to the bank feed transaction. Or , starting with the feed item search for a match to find either the unpaid liability or the payment transaction made by QB on your behalf. 

 

Planning ahead, you will add employee match as a separate payroll item, which, when running payroll, will also become a payroll liability.  All payroll costs, including taxes, are posted on the date of payroll as accrued, even if you use cash basisvreporting

Hailstorm
Level 1

Categorizing 401K payments to Guideline

Perfect! Thanks John! :)

andriarad
Level 2

Categorizing 401K payments to Guideline

How do you suggest setting up the Employer Match additional Payroll Item in QuickBooks Online in order to book the EMployer match portion as a liability before this is actually paid to Guideline along with the other taxes?

AlcaeusF
Moderator

Categorizing 401K payments to Guideline

Hi @andriarad,

 

Welcome aboard to the Community. Allow me to chime in and share some information about how you can set up the Employer Match additional item in QuickBooks.

 

You can enter Employer Match for the 401(k) plan as a company contribution in the system. If you're using the Enhanced version of payroll, you can set up the item through the Payroll settings section.

 

Here's how:

 

  1. Click the Gear icon in the upper-right corner, then select Payroll Settings.
  2. Under Payroll, select Deductions / Contributions.
  3. Select Add a New Deduction/Contribution
  4. For Category, select Retirement Plans.
  5. For Type, select the applicable retirement plan.
  6. Enter the name of the provider or plan.
  7. Hit Ok.

 

If you're using a different payroll subscription, you'll need to contact Payroll Support for assistance.

 

For more information, as well as how to assign a retirement plan deduction and company contribution, I recommend the following article: Retirement plan deductions/contributions.

 

Drop me a comment below if you have any other questions related to adding payroll items. I'll be happy to help you some more.

Q_B Desktop User
Level 1

Categorizing 401K payments to Guideline

What about the fees that are charged by Guideline to run the 401K plan?  Are they also a payroll expense?  Every month Guideline charges us somewhere around $80 to run the 401k plan for us and I'm not sure how to account for those charges.

KurtKyle_M
QuickBooks Team

Categorizing 401K payments to Guideline

Thanks for joining the thread, @Q_B Desktop User. Please allow me to share what I know with your concern.

 

Yes, you can consider the fees charged by Guideline to run the 401k plan as payroll expenses.

 

If you are unsure on how to use the account, you can refer to your preferred accountant. 

 

As always, if you have any additional questions related to QuickBooks. Let us know by leaving a comment down below. We got your back. Keep safe and Happy weekend! 

Justin53
Level 1

Categorizing 401K payments to Guideline

Yes you will assign this to the payroll liability accounts. I had to do this for my company too. In my balance sheet I noticed I have two payroll liability accounts for Guideline 401k Roth and Guideline 401k Traditional. So I went to my bank feed transaction and did a split on the transaction with appropriate amount going to payroll liability account for the 401k Roth and appropriate amount going to the 401k traditional payroll liability account. Then I accepted it. This created a $0 balance for these payroll liability accounts in my balance sheet. Quickbooks will automatically show your contributions as a business expense (if you decide to do a match) in your profit loss statement and no further action is needed

LBK9
Level 1

Categorizing 401K payments to Guideline

How did you get the information to split the debit properly?  I also have liability accounts for 401k traditional and 401k Roth.  Do you have to login to Guideline every week to ascertain what amount to attribute to the two different accounts?

Candice C
QuickBooks Team

Categorizing 401K payments to Guideline

Good afternoon, @LBK9

 

Thanks for chiming in on this thread. I hope your day is going well so far. 

 

Yes, you'll have to login to Guideline every time to ensure of the amount. 

 

Also, as for splitting the debit, you'll need to consult with your accountant to be sure of these details. They'll be able to give you the best advice for your business. 

 

I'm only a post away if you have any other questions or concerns. Have a splendid day! 

bbricoli
Level 3

Categorizing 401K payments to Guideline

Can someone please tell me how to record the withdrawals from our checking account for the Guideline 401k employer match?  The individual matches are automatically posted to the payroll expense account for employer match - NOT a liability account.  So then when Guideline does the withdrawal from our checking  (and it comes through the bank feed)- I don't know what to do with it.  If I record to the expense account I am double booking the $$$.  I tried changing the default employer contribution account to a liability account - but the individual match payments that are automated via QBO payroll DECREASE the liability - so this is not even doable.   I've had a couple of calls with QBO and one with Guideline and one with our CPA.  No one has been able to give me a solution.  Although the QBO advisor today is still looking into it.

 

Please help me someone.  Thank you!

ZackE
QuickBooks Team

Categorizing 401K payments to Guideline

Thanks for joining this thread, bbricoli.

 

To properly identify which accounts you should use and what to do with Guideline's withdrawals from your checking account, I'd recommend working with an accounting professional. If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

 

Here's how it works:

  1. Go to our Find a ProAdvisor page.
  2. Use the City or ZIP search field to specify a location.
  3. Select Find a ProAdvisor.
  4. Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.

 

Once you've found an accountant, they can be contacted through their Send a message form:

  1. Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
  2. Enter your appropriate info in the Your nameYour email, and Your phone number (optional) fields.
  3. Hit Send message.

 

You'll also be able to find many detailed resources about using QuickBooks in our help article archives.

 

Please don't hesitate to send a reply if there's any questions. Have an awesome day!

bbricoli
Level 3

Categorizing 401K payments to Guideline

Hi.  I am a certified Pro Advisor and I can't answer this.  Our CPA can't answer this.  Guideline can't answer, and 2 QBO advisors that I called can't answer.  

 

This is not helpful in any way.  

LBK9
Level 1

Categorizing 401K payments to Guideline

I had this same confusion.  I am not a tax professional- just a thorough bookkeeper for my own small business. This is where I landed on this issue:  You're not double-booking the expense.  The expense is tracked through payroll and shows up on your income statement (P&L.)  These accounts were auto-generated when you signed up with Guideline (although both Guideline and QB seem confused as to who initiated that- but no matter.)  The debit that you see in your feed should be booked to the associated liability register.  Liability registers track debt or obligations and show up on your balance sheet- not your P&L.  So, when you book the debit from your checking account and apply it to the Guideline Liability register, you're simply tracking how much of the payroll expense you're remitting.  So, no double-booking.  One account is tracking the expense.  The other is tracking the liability (debt) associated with the program.  

LBK9
Level 1

Categorizing 401K payments to Guideline

Meant to reply to you directly, but it was published at the bottom of the thread.  Hope it helps. 

bbricoli
Level 3

Categorizing 401K payments to Guideline

OK - I FOUND THE SOLUTION.  After all the calls with QBO and Guideline - I finally have this resolved.

There is actually a liability account for the 401ks (roth and traditional).  It was there.  It was automatically created when Guideline integrated with our payroll.  So all you have to do is reduce the liability when Guideline withdraws the money from your account.  I did have help on the third call with Jack at QBO - great advisor - who found the liability accounts for me.  Then I was able to take it from there.  It's so simple I am embarrassed.  Hope this helps someone else if they are going down this rabbit hole.  Guideline and QBO should be able to tell clients that a liability account has been created. It should not have taken so many calls.  

bbricoli
Level 3

Categorizing 401K payments to Guideline

Thanks for your reply.  I just posted again - before seeing your reply - that I finally found the liability accounts and was able to reduce them appropriately.  This is really so simple.  Guideline and QBO should be able to advise clients on this.  Thanks for your help.  

AKOz
Level 1

Categorizing 401K payments to Guideline

I've trying to do my own research on a similar issue and wondering if you could give me more insight on your process to resolve your issue.  We have 401Ks(traditional and Roth) and company contributions.  I believe these deductions are set up correctly meaning they appear on the paystubs and are listed under payroll liabilities on the balance sheet.  We have an outsourced investment company that I provide all the contributions and payment is provided via ACH.  What do I do when I import that bank transaction?  I have been just creating an expense which doesn't seem right.  Do I need to match it to the payroll liabilities?  How do I do that?  Any insight you can provide will be greatly appreciated.


@bbricoli wrote:

OK - I FOUND THE SOLUTION.  After all the calls with QBO and Guideline - I finally have this resolved.

There is actually a liability account for the 401ks (roth and traditional).  It was there.  It was automatically created when Guideline integrated with our payroll.  So all you have to do is reduce the liability when Guideline withdraws the money from your account.  I did have help on the third call with Jack at QBO - great advisor - who found the liability accounts for me.  Then I was able to take it from there.  It's so simple I am embarrassed.  Hope this helps someone else if they are going down this rabbit hole.  Guideline and QBO should be able to tell clients that a liability account has been created. It should not have taken so many calls.  


 

AKOz
Level 1

Categorizing 401K payments to Guideline

I've trying to do my own research on a similar issue and wondering if you could give me more insight on your process to resolve your issue.  We have 401Ks(traditional and Roth) and company contributions.  I believe these deductions are set up correctly meaning they appear on the paystubs and are listed under payroll liabilities on the balance sheet.  We have an outsourced investment company that I provide all the contributions and payment is provided via ACH.  What do I do when I import that bank transaction?  I have been just creating an expense which doesn't seem right.  Do I need to match it to the payroll liabilities?  How do I do that?  Any insight you can provide will be greatly appreciated.


@bbricoli wrote:

OK - I FOUND THE SOLUTION.  After all the calls with QBO and Guideline - I finally have this resolved.

There is actually a liability account for the 401ks (roth and traditional).  It was there.  It was automatically created when Guideline integrated with our payroll.  So all you have to do is reduce the liability when Guideline withdraws the money from your account.  I did have help on the third call with Jack at QBO - great advisor - who found the liability accounts for me.  Then I was able to take it from there.  It's so simple I am embarrassed.  Hope this helps someone else if they are going down this rabbit hole.  Guideline and QBO should be able to tell clients that a liability account has been created. It should not have taken so many calls.  


 

KamalB
Level 1

Categorizing 401K payments to Guideline

Hi

 

The article on how to categorize the contirubtions is not there.  Would you please repost the link.   Retirement plan deductions/contributions.

Divina_N
QuickBooks Team

Categorizing 401K payments to Guideline

You're in the right place, @KamalB. I'm here to ensure you'll be able to categorize 401K payments in QuickBooks Online (QBO) smoothly.

 

The link you've provided may have been updated. You can use this article instead to guide you in categorizing the payments: Set up a retirement plan.

 

Additionally, running reports to view your payroll info, company finances, and employee details is a breeze in QBO. For the detailed guide, feel free to check this page: Run payroll reports in QuickBooks Online Payroll.

 

Please let me know how this goes. I'm always here ready to give further assistance to make sure everything will get resolved. Have a good one and keep safe.

lynn63
Level 2

Categorizing 401K payments to Guideline

I have QB Desktop with Assisted Payroll. We just started using Guideline in August. Guideline has accrued the payroll deferrals in a Quickbooks liability account called Accrued Liabilities, which is actually a parent account for multiple liability accounts. I would like to change the account to a specific liability account for Guideline deferrals. When I try to do this, it tells me I have to go to Employee Benefits and select Manage Plan for Guideline. I do that, but when I log into Guideline I can't find a setting to update the liability account. 

 

Also, when Guideline withdraws the liabilities, they do not create an entry in Quickbooks. When I go in to try to create custom liability payments, and select a Guideline item I get a message that the Payroll item has no liability agency, and it gives me the option to set one up. But when I click "OK" it gives me the same message that I have to go to Employee Benefits and select Manage Plan for Guideline. 

 

Neither Intuit nor Guideline is not being helpful at all. Guideline says I have to contact Quickbooks support about, and Quickbooks support tells me I have to contact Guideline. 

ChristieAnn
QuickBooks Team

Categorizing 401K payments to Guideline

Welcome back to the QuickBooks Community, lynn63. I can see that things have been challenging for you in finding the right support team to assist with what you need. I'll ensure you'll be routed to the right person to help you in updating a specific liability account and organize it accurately.

 

QuickBooks depends on the information your third-party app shares. Since the settings you want to manage are within Guideline, I extremely suggest contacting them to understand how to make changes in a liability account for Guideline deferrals and how it works with our program.

 

You can visit this website to find the specific phone number and email address so you'll be able to contact the Guideline Team.

 

Lastly, I'm adding this article so you're able to see how you can set up manual payroll in QBDT without a payroll account: Set up manual payroll without a subscription in QuickBooks Desktop.

 

Keep me in the loop by leaving a reply below if you need more help with managing your payroll data or transactions. I'm always here to help you, lynn63. Have a great day!

lynn63
Level 2

Categorizing 401K payments to Guideline

I'm sorry ChristieAnn, your response isn't helpful as I've already called Guideline several times at the number on the website link you provided, and they have no clue what a payroll item or chart of accounts even is. They thought I meant the bank account, and kept telling me over and over that they withdraw the funds automatically from the bank account I specified and don't make an entry in Quickbooks, which I already knew.

 

Also, we have Quickbooks Assisted Payroll, so I don't need help setting up manual payroll in QBDT. 

 

What I want to do is update the account used for Guideline liabilities in the payroll item list. I can do this with every other payroll item, by right clicking and editing it. I can update the agency in my vendor list to whom the liability is paid, and the account in my chart of accounts that records the liability. I cannot do that with the Guideline-created payroll items and it's very frustrating to be told by Quickbooks that I have to call Guideline and to be told by Guideline that I have to call Quickbooks. 

 

The person at Guideline I spoke to yesterday had no idea what I was talking about (it's not her "wheelhouse") but that she would get back to me by email after checking with some other people. But I haven't heard back from her. 

 

lynn63
Level 2

Categorizing 401K payments to Guideline

Responding to my own post, I did hear back from Guideline and this is what they said about the Guideline-created payroll items:

 

"We did create those items, but we don't create the linkage. We do not specify which chart of accounts those deductions are associated with. That logic is entirely on the Intuit side and Guideline has no control over that.

Our team reached out to Intuit internally and they recommend for you to contact them in order to get help adjusting their chart of account mappings. They were also able to provide a helpful article that may help" (The article was about Quickbooks Online Payroll which I do not have.)

 

It's not possible to create a new payroll item without linking it to an account. And of course Intuit says they have no control over these payroll items because they were created by Guideline. So it appears I'm stuck with a really unsatisfactory integration unless I change either our payroll system or retirement plan.

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