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How to use net pay in budget and track 401k contributions?

JimB66

Hi,

For many (many :-)) years I've used the Paycheck Wizard to set up and track gross pay, deductions, etc. But I've noticed this doesn't work very well for Budgeting. From searching/reading, it seems the way to do that is to just have an income reminder for Net Pay.

I understand that….but what I also want to do and can't seem to find info on is to ALSO track my 401k contributions (and employer match). I already do this with the gross pay as I have a 401k account in Quicken already.

Right now, Budgeting is more important to me than the gross pay tracking so I want to switch to Net Pay, but still want to track the 401k contributions. Is there a way to do both?

Thanks.

Jim

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Jim_Harman

If you just work with net pay, you will lose the ability to use Quicken's Tax Planner.

I suggest that you continue to track your gross pay but on the Budget page, click on Manage Budget Categories and add your Tax Categories to your budget. Also in the Transfers section, add the 401(k) account in the Transfers Out section.

This discussion is for Mac budgeting but the recommendations are the same.

https://community.quicken.com/discussion/comment/20376816#Comment_20376816

JimB66

Thanks for the info - I think I tried that approach but it didn't seem to align budget with actual. But I may have done it wrong, so I may revisit it.

However, I have never used the Tax Planner, so losing that ability is not really an issue for me. It seemed "easier" to just track Net Pay, with 401k contributions.

Jim

Jim_Harman

I should add that if you enter net pay, Quicken's tax reports will not work either.

When you enter your gross pay, you will want to make sure to include all of your deductions in your budget, including taxes and and transfers to other accounts, as described above. Then your budget will have (Gross pay) - (all deductions), which of course is your net pay.

JimB66

Thanks.

I care nothing about tax reports/tax planning. I want an easily-set-up way to track my monthly budget, with the only "extra" being tracking my 401k contributions (mine & employers).

So, is there any way to use Net Pay to do this? It doesn't sound like it…..

Jim

Jim_Harman

I suppose you could set up your paycheck as a split deposit in your checking account as follows.

Net pay with category of "After tax income" or whatever
401(k) contribution amount entered as a positive amount with the same category
401(k) contribution entered as a negative number with Category = [<your 401(k) account>]

Then include the 401(k) transfer in your budget.

This is not what I would recommend, but it's your data and you can do what you want with it.

JimB66

Appreciate the options, thanks!

mshiggins

You can keep your paycheck transaction using gross pay with deductions and still budget for net pay.

In Planning > Budget > Manage Budget Categories; instead of selecting the individual categories in your paycheck transaction, go to the bottom of the category groups (left column), and click on Paychecks. That should present any Quicken Paycheck transactions you have and allow you to select the one(s) you want for the budget.

You'd still need to select the transfer of your 401k contribution as a separate choice.

-JP

JimB66

https://community.quicken.com/discussion/comment/20389728#Comment_20389728

Oh! Thanks! I'll give that a try, also. I'm not sure how I missed that option.

Jim