Question

Simple IRA contributions

Forum|Forum|4 years ago
January 15, 2022
2 replies
0 views

I just set up a Simple IRA for my 2 employees and myself. I transferred funds to American Funds, the company that manages our retirement account, but I am unsure how to separate the employee contribution vs employer contribution. Please any suggestions would help.

QuickBooks Online

MariaSoledadG

Allow me to share a few information about contributions in QuickBooks Online Payroll (QBOP), stephengroeschel.

When setting up a contribution for your employees, you'll have the option to set up a company-paid contribution separately. I've attached this screenshot for your guide:

To set this up, follow the steps below:

Select Workers, then select Employees.
Select the employee's name.
Select the pencil icon in the Pay section. Scroll down on the deductions section. Then select +Add deductions.
Select Retirement Plans under Deduction/Contribution type. Then select the type of Retirement plan
Enter the name of the provider. And the amounts per pay period.

Then, pull up the Payroll Summary report to double-check the employee/employer deduction information. Here's how:

Go to the Reports menu.
Use the Find report by name search bar to search for reports by name. You can also browse the list.
Select the report to open it.

However, if you have created items for your employer contribution and another one for your employee, you can separate the account on the Accounting Preference page.

I've added this article to the list of reports available in QBO: Run Payroll Reports. Additionally, you can also customize a report to get the information you need. Please check out this article: Customize Reports In QuickBooks Online.

Fill me in if you have any concerns about IRA contributions. I'll be right here to help.

D

DIETRYINGAuthor

That was very helpful thank you so much!

One more question...when the money comes out of my bank account and goes to the American Funds IRA company, how do I record that? It ends up in my Transactions-Banking as a transaction that needs to be matched. I am not sure how to categorize this? It is the employee deductions+employer contributions combined together in one payment.

katherinejoyceO

Thanks for the follow-up question, @DIETRYING. I'll be your guide today in recording your transactions in QBO.

You can match the banking transactions with your existing ones with the employee and employer deductions to avoid getting duplicates.

Here's how:

Find a downloaded transaction with the Match option in the Action column.
Note the Date, Description, Payee, and amount spent or received.
Select the downloaded transaction to expand the view, then review the Matching records found in QuickBooks.
Select the link next to each match to get more details.
Make sure this is the correct match. In particular, review the Deposit to, Payment method, and Bank account fields on forms for the existing transaction in QuickBooks.
If this is the correct match, close the open transaction.
Select Match.

For further insights into this process, check out this article: Categorize and match online bank transactions in QuickBooks Online.

To make sure your transactions are categorized to the correct account, I'd recommend consulting an accountant.

Come again if you have additional concerns. We're always around to help.

J

jelseth1986

Hello ! Were you able to send funds to American funds electronically through quickbooks ? I am trying to this exact same thing and just started with American funds. How has this been working for you and what is the most productive way to process ?

I have set up the employee deduction amount with company contribution percentage under each employee in payroll. How do I send the funds and where do I find the total amount that needs to be sent ?

L

LeizylM

Hi there, jelseth1986.

I'll make sure you'll be able to send the fund and find the total amount in QuickBooks Online (QBO).

In QuickBooks, once you set up a retirement plan deduction, it'll be reported on your payroll tax forms. By the time you create and run payroll, the retirement amount will show in their paychecks.

For additional resources, check out the Retirement plan deductions/contributions article. It provides an overview of how to assign the payroll item to employees and steps to apply the deduction/contribution.

Please don't hesitate to leave a comment below if you have additional questions about paying deductions. It's always my pleasure to help you.

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