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AnjaS
April 24, 2020
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How to categorize 401k employee contribution S-Corp

  • April 24, 2020
  • 1 reply
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I own an S-Corp and just started contributing to a 401K for myself and set everything up for it in Quickbooks so it's recorded when I run payroll. In terms of accounting, it seems like Quickbooks is already including the employee contribution that I've set up under wages in payroll expenses (when I run reports, it just shows the full amount for wages, which includes what I'm withholding as contribution). However, the transfer I make to the 401K account that's coming from my business bank account is showing up under banking in quickbooks. How do I make sure it's not showing up twice in my accounting/reports? Should I simply exclude this transfer when I review banking or is there a way to match it with the wage payment it was part of?

Best answer by RenjolynC

Good day, AnjaS.

 

You'll want to create a check for the liability, and match it to the transaction that shows up in the Banking page. 

 

Here are the steps:

 

  1. Go to + New > Check.
  2. Select the account you use for liability payments from the Bank Account drop-down.
  3. From the Payee drop-down, select a vendor or choose Add new if you have not created one.
  4. In the Account details section, select the account you use for tracking your liability payments. If you have sub-accounts for each agency you are paying, make sure to point to those specific accounts.
  5. Enter the appropriate amount for the agency, and add the other information.
  6. Click Save.

.If you’re unsure which account to select, you can follow these steps to check your liability preferences:

 

  1. Go to Gear > Payroll Settings.
  2. Under Preferences, select Accounting.
  3. Find the account under Other Liability & Asset Accounts.
  4. Click OK once done.

You can use this article for reference: Create a payroll liability check.

 

After the steps above, go to the Banking page and match the transactions. Here's an article for the instructions: Assign, categorize, edit, and add your downloaded banking transactions.

 

Please let me know if there's anything else you need. I'll be around to help you some more. Thanks.

1 reply

RenjolynC
RenjolynCAnswer
April 24, 2020

Good day, AnjaS.

 

You'll want to create a check for the liability, and match it to the transaction that shows up in the Banking page. 

 

Here are the steps:

 

  1. Go to + New > Check.
  2. Select the account you use for liability payments from the Bank Account drop-down.
  3. From the Payee drop-down, select a vendor or choose Add new if you have not created one.
  4. In the Account details section, select the account you use for tracking your liability payments. If you have sub-accounts for each agency you are paying, make sure to point to those specific accounts.
  5. Enter the appropriate amount for the agency, and add the other information.
  6. Click Save.

.If you’re unsure which account to select, you can follow these steps to check your liability preferences:

 

  1. Go to Gear > Payroll Settings.
  2. Under Preferences, select Accounting.
  3. Find the account under Other Liability & Asset Accounts.
  4. Click OK once done.

You can use this article for reference: Create a payroll liability check.

 

After the steps above, go to the Banking page and match the transactions. Here's an article for the instructions: Assign, categorize, edit, and add your downloaded banking transactions.

 

Please let me know if there's anything else you need. I'll be around to help you some more. Thanks.

A
AnjaSAuthor
November 2, 2020

Thanks so much! Finally got around to actually doing this and it worked :) 

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