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Gma Sonshine
December 28, 2023
Question

ROTH Employee Contribution Set-up

  • December 28, 2023
  • 1 reply
  • 0 views

I hope you can help. 

 

My S Corp client wants to do a one time employee only contribution of $13,100 to his new ROTH (post-tax) account.  When I try to create that payroll item in QBD, there are no tax defaults.  That isn't right as it is a post-tax contribution.  

 

I tried reading other posts, but most of them were QBO or they completely by-passed the Tax Tracking component.  I tried giving you a few screen shots, but was only allowed one.  

 

Please provide QBD step by steps, including tax tracking.  Thank you

 

Please NO QBO responses.

1 reply

Adrian_A
Adrian_A
December 28, 2023

Thank you for adding a screenshot, Gma Sonshine.

 

I'm here to help you set up a ROTH 401(k) for your employee.

 

In adding a retirement tax item, you'll have to select Deduction on the Payroll item type page since this is for your employee. From there, you'll have the option to Roth 401(k) as its tracking type. Here's how:

 

  1. From the Lists menu, select Payroll Item List.
  2. On the Payroll Item drop-down, select New.
  3. Select Custom Setup.
  4. On the Payroll item type window, choose Deduction. Click Next.
  5. Enter a name. Click Next.
  6. Select the name of agency to which liability is paid.
  7. Enter the number that identifies you to agency.
  8. Select an account.
  9. Click Next, and then select Roth 401 (k) as the Tax tracking type.
  10. Continue with the on-screen instructions to successfully create the item.

 

Before doing any of the steps, I suggest reaching out to your accountant so they can guide you accordingly in setting up the employee's Roth 401(k).

 

Moreover, I've added this article whenever you're ready to pay the employee: Create and run your payroll.

 

I'm always around whenever you have concerns about setting up a payroll item.

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