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Psrbusiness
May 29, 2024
Question

How to account for a SEP IRA Contribution

  • May 29, 2024
  • 1 reply
  • 0 views

This is a C-Corp, the business owner owns 100% shares. He sometimes loans personal funds to the Corp, (and pays himself interest), so I have an account called "Loans from (Owner name)", to keep track of what the Corp owes him. Going the other direction, the Corp will sometimes pay for certain personal bills, and those amounts will come off of that account (decrease what is owed back to owner). For the 2023 tax year, the owner made a SEP IRA contribution for himself in the amount of $35K. The actual funds came from the owner's personal funds but the corp should have paid it. I want to increase the amount the Corp owes to the owner by $35K so that the Corp, in essence, would have made that IRA contribution. The question is, how?

1 reply

S
SarahannC
May 29, 2024

Hi there, Psr. You can treat it as an expense and use correct account for the category.

 

Before anything else, it's best to avoid mixing business and personal funds. I highly recommend checking this link for more details: Mixing business and personal funds. This article is also relevant for QuickBooks Desktop.

 

Here's how to record it in QBDT:

 

  1. Go to the Banking menu and select Write Checks.
  2. Click the Expenses section.
  3. Choose the appropriate account. If you haven't set up an account yet, you can create one.
  4. Enter the amount and hit Save & Close.

 

Still, I suggest consulting with your accountant. They can provide accurate information on how to handle and help you use the correct category.

 

  1. Go to this link: Find a ProAdvisor.
  2. Make sure to fill in the required fields. Location, Service provided, Industry served, and Product supported.
  3. You'll automatically see the available accountants located near your area.

 

You'll want to check out additional details on the SEP-IRA plan.

 

Be sure to add a new post if you have follow-up concerns. I'm always here to provide the details you need.

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