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N
nsoroma
March 27, 2025
Question

How do I categorize retirement account entries in QBO?

  • March 27, 2025
  • 1 reply
  • 0 views

I have both a SEP IRA and Roth IRA accounts connected to QBO. I've matched my contributions from my bank to the accounts - but - there is a long transaction list where the account moves money in/out of funds, earns interest, and pays a dividend to the account. I have NO idea how to categorize these. This isn't money that exists in my operating account, it's not "real" in a way - do I need to create a new account to assign all these deposits/expenses to so it evens out to what is in both accounts? Or do I just exclude everything except my contributions? Appreciate any help - thanks!

1 reply

T
TimotiSbr
March 28, 2025

Hello,

 

you only need to categorize your actual contributions and withdrawals. The internal investment activity (like buying/selling funds, dividends, etc.) doesn’t impact your P&L and isn’t tied to your operating cash, so you don’t need to treat them as income or expenses.

 

What worked for me was creating a new Retirement Investment Clearing account (Other Current Asset or Equity, depending on how you track things) and using that to balance the internal activity. You can also use journal entries to reflect dividends and reinvestments if you want to track them cleanly without messing up your books.

 

But if you just care about reconciling and reporting cash flow, excluding everything except the contributions might honestly be enough, especially if your CPA handles year-end investment reporting anyway.

 

Hope that helps!

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