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DPARENT
September 6, 2023
Question

Hello Quickbooks Community. I did a withholding for my SOLO 401K in my payroll. How do you normally classify this ? I noticed a journal entry for it.

  • September 6, 2023
  • 1 reply
  • 0 views
I understand I send it to my 401K provider, but what is the correct way to classify these in quickbooks online ?

1 reply

R
RCV
September 6, 2023

Let me share some information about tracking SOLO 401K in QuickBooks, DPARENT .

 

A solo 401(k) plan is intended for self-employed business owners who have no other employees other than their spouse or business partners. This type of 401(k) is also known as an individual 401(k) or a self-employed 401(k). Participants in a solo 401(k) plan can contribute as both an employer and an employee to maximize their retirement plan contributions and business deductions.

 

In QuickBooks Online (QBO), here are the supported retirement plans in QuickBooks:

 

  • 401(k) / 401(k) catch-up
  • Simple 401(k) / Simple 401(k)
  • 403(b) /403(b) catch-up
  • SARSEP / SARSEP catch-up
  • Simple IRA / Simple IRA catch-up
  • After-tax Roth 401(k)
  • After-tax Roth 403(b)

 

After-tax Roth plans to calculate your employees' gross wages and are subject to all taxes at the time of contribution per IRS regulations. For choosing a retirement plan, you can check with your plan provider for details. You can also visit the IRS website to learn more. 

 

In your case, because you are withholding my SOLO 401K in your payroll, you should consult with your accountant or tax adviser. They'll tell you how to categorize this one in QuickBooks. More information on setting up a retirement plan deduction or a company contribution in QuickBooks Online Payroll to track and tax it appropriately can be found in this article: Set up a retirement plan.

 

Also, to know how much your company can contribute each year, check out this page from the IRS: IRS Retirement Topics - Contribution Limits. 

 

Feel free to comment below if you have any additional inquiries about 401k contributions and deductions. I'll be around to lend a helping hand. Stay safe!

D
DPARENTAuthor
September 8, 2023

I understand all the rules for the Solo 401K.   I put the deduction on my paycheck and Quickbooks deducted this from my business P & L.  Now how do I write this check without it deducting twice from my P & L. 

E
Ethel_A12
September 8, 2023

Thank you for getting back to us, @DPARENT.

 

I'll help you write a check for the 401K deduction that will not affect the Profit & Loss (P&L) twice.

 

Here's how:

 

  1. Click +New.
  2. Choose Check.
  3. Select the account for liability payments from the Bank Account dropdown.
  4. Choose the vendor from the payee vendor.
  5. Under the Category, select the account used for tracking liability payments and enter the amount.
  6. Enter necessary details and click Save.

 

Here is an article for the detailed steps of the process: Create a payroll liability check.

 

I'm also adding this article that contains checklist for the year-end: Year-end checklist for QuickBooks Online Payroll.


Let me know if you have questions about liabilities in QuickBooks Online. I'm always here to help. Have a great day.

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