Issue setting up paycheck with Roth 401k contribution.

jayd
jayd Member
When I enter my paycheck in Quicken I add a line for Roth 401k in the after-tax deductions section. See below an example:

Salary: $3,000.00
Taxes: Federal Withholding, State Withholding, SSA, Medicare - $400.00
Roth 401k (after-tax deductions): $1,000.00 in the category I select my Roth 401k account.
Net Pay: $1,600.00

In the Deposit Accounts I enter my checking account and the amount $1,600.00

This setup creates a deposit on my checking account for $1,600.00 (as expected).

It also creates a contribution to my Roth 401k account for $1,000.00 (as expected).

The issue is that in the Roth 401k account register, the contribution appears as coming from my checking account where the paycheck is being deposited.

The company is making the deposit to the Roth 401k. I can't seem to find a way to setup the paycheck in a way to show the contribution coming from the company, not from my checking account.

Any suggestions?

Thanks.

Best Answer

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Answer ✓
    Well, although it's not entirely correct, it gets you to the right place: Salary $3K, Taxes, etc. -$.4K, Roth Account -$1K, net to checking $1.6K, so I'd be tempted to leave it alone unless "timing" is a big issue, like the company makes their contribution once a quarter.
    You could eliminate the $1K from the paycheck, beginning with $2K of salary, and instead "deposit" the $1K to a offline "checking" Account with an offset of salary.  When the money actually is deposited in the 401(k) Account you take that $1K out of the offline checking Account and transfer it to the 401(k).
    That would keep your current salary up to date and reflect the deposit in the 401(k) when it shows up.
    Another way of doing this would to, again, drop the $1K from the paycheck.  Then, when the money is actually deposited to the 401(k) you could make a "Deposit" in the 401(k) Account with the payee being the employer and the offset to the salary Category.

Answers

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Answer ✓
    Well, although it's not entirely correct, it gets you to the right place: Salary $3K, Taxes, etc. -$.4K, Roth Account -$1K, net to checking $1.6K, so I'd be tempted to leave it alone unless "timing" is a big issue, like the company makes their contribution once a quarter.
    You could eliminate the $1K from the paycheck, beginning with $2K of salary, and instead "deposit" the $1K to a offline "checking" Account with an offset of salary.  When the money actually is deposited in the 401(k) Account you take that $1K out of the offline checking Account and transfer it to the 401(k).
    That would keep your current salary up to date and reflect the deposit in the 401(k) when it shows up.
    Another way of doing this would to, again, drop the $1K from the paycheck.  Then, when the money is actually deposited to the 401(k) you could make a "Deposit" in the 401(k) Account with the payee being the employer and the offset to the salary Category.
  • jayd
    jayd Member
    Hi Tom. Thank you for the suggestions. I didn't think about reducing the salary and capturing the deposit directly into the Roth 401k when it is made by the company. That works. Thank you.
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