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Tax Planner and spouse 401k employer match contributions

My wife and I each have a 401k each with an employer match. I have set up both our paychecks with employee contribution as a pre-tax transfer and have used the employer match field for the employer's contribution. I have also set the tax schedules for both accounts set to blank (as I understand they should be). In tax planner, my 401k seems to be operating just fine, e.g., my contributions are substracted from my (self) gross wages while my employer contributions are not. My wife's account, however, has her employee contributions subtracted from my gross wages (her employer contributions are not). So, I believe quicken is using the same 410k tax impact (or whatever the hidden account is) for both my 401k and my wife's.

If I set the tax schedule transfer on my wife's 401k account to W2 spouse wages, then Tax Planner correctly subtracts out her 401k contributions from her (spouse) gross wages but also substracts out the employer match (which is a transfer into her account). So, while Tax Planner shows the total taxable income (self plus spouse), the individual taxable incomes are off.

While I could stop using the employer match field in the paycheck and just enter the employer contributions manually into the 401k accounts, I feel like I may be making a mistake with the Tax Planner. Seems like quicken should have two hidden 401k tax impact accounts, one for self and one for spouse, or there should be a way to expressly set the tax schedules for the accounts and exclude employer match.

*I searched on the web for two days before making this post, so I apologize if the answer lies elsewhere on this board.

Best Answers

  • markus1957
    markus1957 SuperUser, Windows Beta Beta
    edited April 5 Accepted Answer
    It should be spouse.  Probably the cause.  Unfortunately that can only be specified at account setup.  You can create a new account and move all of the old transactions over to it. It's a mess but I think you are getting closer.

    adding- you will have to deactivate the old account and activate the new one for downloads.  Not sure if a new paycheck will be required.
  • markus1957
    markus1957 SuperUser, Windows Beta Beta
    Accepted Answer
    Our responses crossed. Follow instructions from last comment. Right click on a transaction in old account register, left click Move Transactions. New window will allow you to bulk select transactions to move and to select the new account to move them to.

Answers

  • markus1957
    markus1957 SuperUser, Windows Beta Beta
    edited April 5
    I just set up a spouse paycheck and a 401k in a test file.  It worked as expected with the employee deduction and employer match reporting as expected under the spouse details section.  Note the 401k deductions are hidden categories and not editable in the paycheck reminder.

    I'm going to venture a guess that you may have originally not set up your spouse paycheck with Salary Spouse as the category under wages; but realizing the mistake then changed it. That would have caused the deductions to be applied to the regular deductions because they are automatically applied based on the original selection; they are not user selected.

    I suspect if you delete the old spouse paycheck reminder and set up a new one, it will work as expected.  This might be considered a bug because if a user edits the paycheck wages category from your wages to spouse wages, the uneditable deduction categories for employee contribution and employer match should also be changed to their spouse designations.

  • Rain
    Rain Member
    I don't use the built in wage categories, I use "income:Gross Salary:ME" and "income:Gross Salary:WIFE". Does one have to use the built in salary categories? That seems like a poor design choice and something that would be an easy fix - just allow the user more control over setting how transfer ins/outs of a 401k account should be handled, or just allow the user to tell the tax planner how each employer contribution should be handled. Any easy fix to this other than redoing my categories? I've been using them for 3 years.
  • Rain
    Rain Member
    Just to be clear, all the pre-tax deductions on her paycheck work (by setting the tax category) It's just the 401k that's an issue.
  • Rain
    Rain Member
    Pretty sure I made her paycheck as "spouse" wen I first made it, if I recreate it with this setting, then change it back to "income:Gross:Wife" think there is a good chance her 401k contributions will go to the right place and not include the Employer Contributions (when the 401k tax schedule is left blank)?
  • markus1957
    markus1957 SuperUser, Windows Beta Beta
    edited April 5
    You don't need to use the built-in Salary categories (except as needed for the hidden 401k contributions categories) but you would need to make sure the correct tax form lines are assigned to them per the details section of the tax planner. You also don't need to use the paycheck wizard, you can manually create the splits in a transaction/reminder and they should show up in the planner based on the tax lines assigned to your custom categories.

    I guess what I would say is that when using the wizard, the tax line for the 401k contributions/match get created based on whatever tax line you originally assign to gross wages.  Further, if you later change that tax line in gross wages, the contributions tax line appears not to change.

    Bottom line, you don't need to change your categories but you do need to create a new paycheck wizard reminder for your wife in order to get future 401k contributions to show up under the spouse details section.  That won't change previous entries but it should get her contributions and the employer match to hit the right buckets.  If you create a new paycheck reminder from the wizard you could have it populate from the beginning of the year and then delete her existing paycheck entries.  That should put 2021 on the correct footing.

    Adding- You may have assigned your custom spouse category originally but my guess is that the custom spouse category did not have the correct tax form line assigned to it; it needs the W-2: Salary or wages, spouse line assigned to it. I'd guess you changed it after it did not show up under spouse in the planner but again, that would not change the contributions.  I'm doing a lot of guessing but I am pretty sure a new Paycheck wizard entry will work correctly with your custom category as long as the wages are showing up under the spouse section of the planner.

    Adding- her other pre-tax deductions show up because you have direct control over the category/tax form line.  It is only the 401k that has the wonky under the hood problem with 401k contributions.  But for the employer match, it could be handled with user control just like the other deductions.
  • Rain
    Rain Member
    Thanks for the suggestion, I tried making a new paycheck/gross/spouse income, no dice :( It puts the wife's income in the spouse wages correctly, but still dumps her 401k contributions and employer match into my wages.
  • Rain
    Rain Member
    Sorry, just saw you tried it and it worked. No clue why mine is not working or why Quicken has the 401k act this way. Frustrating.
  • Rain
    Rain Member
    > @Rain said:
    > Thanks for the suggestion, I tried making a new paycheck/gross/spouse income, no dice :( It puts the wife's income in the spouse wages correctly, but still dumps her 401k contributions and employer match into my wages.

    Sorry - meant dumps just her contributions into my 401k. For some reason, it appears any paycheck I make for her gets the 401k contributions assigned to _401kContrib instead of _Spouse401k.
  • Rain
    Rain Member
    Wondering if there is something with her 401k account or the use of the 401k option in the pre-tax deductions in the paycheck wizard....the Employer matches are not showing in wages for her or me (which is good), it's just her contributions which keep getting placed in my wages.
  • Rain
    Rain Member
    The "who's account" for her 401k says "mine".
  • Rain
    Rain Member
    Pretty sure this is the issue...is there a way to change this?
  • markus1957
    markus1957 SuperUser, Windows Beta Beta
    edited April 5 Accepted Answer
    It should be spouse.  Probably the cause.  Unfortunately that can only be specified at account setup.  You can create a new account and move all of the old transactions over to it. It's a mess but I think you are getting closer.

    adding- you will have to deactivate the old account and activate the new one for downloads.  Not sure if a new paycheck will be required.
  • Rain
    Rain Member
    That has to be one of the dumbest "features" of Quicken ever....this isn't a college Chemistry exam, you should be allowed to fix mistakes.
  • Rain
    Rain Member
    Is there an easy way to transfer the transactions to a new account?
  • markus1957
    markus1957 SuperUser, Windows Beta Beta
    yes. You can right click on a transaction in the incorrect 401k and select Move Transactions.  A new window will pop up that allows you to select them in bulk and select the account they are to be moved to.  So create the new 401k first.
  • Rain
    Rain Member
    Just to confirm, that was the issue. It's working now, just need to figure out how to port transaction from old account to new account.
  • markus1957
    markus1957 SuperUser, Windows Beta Beta
    Accepted Answer
    Our responses crossed. Follow instructions from last comment. Right click on a transaction in old account register, left click Move Transactions. New window will allow you to bulk select transactions to move and to select the new account to move them to.
  • Rain
    Rain Member
    All set - thanks! Much appreciated!
This discussion has been closed.