Paycheck should allow different accounts for Employee and Employer contributions

vivman1107

My current employer's 401k separates employee and employer contributions when reporting them. I created another account in Quicken for employer contributions to accurately track them. It would be great if I could specify the account for employer contributions in the paycheck instead of having it go to the same account used for employee contributions.

vivman1107

This becomes more important as my employer allows for Roth 401k contributions. Employer contributions are always pre-tax so it is important to differentiate employer and employee contributions.

Cooper's Dad

Quicken does this, though it's not easy to recognize. When entering or modifying paycheck splits, the edit button to the right of the pre-tax deduction for 401k deferrals opens a window for two dollar amounts to enter, one for employee deferral and the other for employer match/contibution.

Chris_QPW

Cooper's Dad said:

Quicken does this, though it's not easy to recognize. When entering or modifying paycheck splits, the edit button to the right of the pre-tax deduction for 401k deferrals opens a window for two dollar amounts to enter, one for employee deferral and the other for employer match/contibution.

Adding what @Cooper's Dad said above, it is important to note that both the employee and employer contributions will go to the same 401K account, and that might not be what @vivman1107 wants (based on the description given, but that might be the wrong idea to start with).

But in fact I can't see how any 401K would work like that.  I have never heard of a 401K plan that keeps the actual money/securities separate.  Even though they report the contributions separately all the contributions go into the same account.

Quicken does have a way to report this, it isn't obvious because Quicken's paycheck reminder does some thing "hidden" that you won't seen just looking at it.  If you right click on a paycheck in your account register and select to create a reminder it will change it into a regular reminder, so you can see what it does. Here is an example.


What you see in line #8 they do a transfer to the 401K, that gets the money there. But then in line #9 they offset it with equal but opposite amount going into a category.  It is this category that the tax reports will use to let you know how much the employer contributed.

Chris_QPW

P.S. If you REALLY want to create an extra account and such, so you can see the paycheck reminder is really just an income reminder hidden by a dialog interface. So you can just use an income reminder to do whatever you like.

J_Mike

Chris_QPW said:

But in fact I can't see how any 401K would work like that.  I have never heard of a 401K plan that keeps the actual money/securities separate.  Even though they report the contributions separately all the contributions go into the same account.

It appears the OP has a Roth 401k. My understanding is that a Roth 401k is effectively two separate accounts - or two sub-accounts).

• The Roth portion is comprised of the employee after-tax contributions. Upon retirement, distributions are non-taxable and handled according yo the Roth rules - similar to a Roth IRA.
• The employer pre-tax contributions are treated separately - same as a Traditional 401k. Distributions are taxable and subject to the rules of a Traditional 401k (RMD;s , etc).

My conclusion is that there is a need for two separate accounts, or sub accounts, when tracking a Roth 401k.

vivman1107

> @J_Mike said:
> It appears the OP has a Roth 401k. My understanding is that a Roth 401k is effectively two separate accounts - or two sub-accounts).* The Roth portion is comprised of the employee after-tax contributions. Upon retirement, distributions are non-taxable and handled according yo the Roth rules - similar to a Roth IRA.
> * The employer pre-tax contributions are treated separately - same as a Traditional 401k. Distributions are taxable and subject to the rules of a Traditional 401k (RMD;s , etc).
>
> My conclusion is that there is a need for two separate accounts, or sub accounts, when tracking a Roth 401k.

J_Mike has it right. I forgot to add it to the OP but made a quick follow-up post. I would like to be able to track the contributions separately. The paycheck dialog would just have to allow choosing of a different account for employer contributions like it does for employee contributions.

J_Mike

vivman1107 said:

I would like to be able to track the contributions separately. The paycheck dialog would just have to allow choosing of a different account for employer contributions like it does for employee contributions.

Given the current functionality - I would suggest the following:

Record the Employee contribution separately under After-tax Deduction - indicating a transfer to the desired account.
Record the Employer contribution under the Pre-Tax Deduction - 401k - with the appropriate account. Leave the Employee Contribution as $0.00.

The downside of this is that I believe you will get a $0.00 transfer to the pre-tax account - representing a $0.00 Employee Contribution. A bit of an annoyance!!