QuickBooks Payroll 401K

QuickBooks Payroll software is one of the best software which is used for calculating payroll and taxes. Payroll and tax calculation is a very challenging activity of any business organizations. With the help of this software, Payroll and taxes calculation becomes a very easy process. Business Owners can now manage and resolve all kind of accounting task, like calculating taxes in QuickBooks, sending bills and invoices, creating paychecks, cash flow management,  etc with the help of QuickBooks Payroll software.

QuickBooks Payroll 401K

QuickBooks is an amazing accounting tool which has advanced features to manage payroll and other payroll related activities along with basic accounting functions. One of those features is QuickBooks Payroll 401(k). Here we are going to discuss features of the 401(K) and how to set up 401(K) in QuickBooks Payroll software. You can also connect to QuickBooks Payroll Support Number +1888-528-1015 for more information or issues about QuickBooks Payroll software.

What Is a 401(k) Plan?

A 401(k) is basically a retirement plan established by an employer for eligible employees who can make salary deferral or salary reduction in the form of offering. It is made on a pre or post-tax basis. The employer can make matching or non elective contribution to the plan. It is made on behalf of eligible employees and who may also get profit sharing as an additional part of the plan. The accumulated earning is based on a tax-deferred way.

How Many Types Of 401(k) Plan Are There?

There are two types of 401(k) plan:

Standardized

If the 401(k) plan is standardized, then all compensation is considered wages subject to consideration when calculating a deferral.

Non- Standardized

If the 401(k) plan is non- standardized, then it has its own qualities. Here, the employer or employee has the option to choose not to contribute certain types of pay for retirement deferral.

How To Set Up 401(k) Contribution In QuickBooks?

There are two ways by which you can setup contribution in QuickBooks.

Method 1: EZ Setup

  • Click Lists from top of QuickBooks Desktop menu and then select the Payroll Item List.
  • Click Payroll Item and select New.
  • Select EZ Setup and Press Next.
  • Next, follow the instruction on the screen.
  • Edit the payroll item when it is created to verify then necessary vendor information.

Remember: EZ Setup automatically adds the company contribution payroll item for retirement plans. Don’t change the preset tax settings.

Method 2: Custom Setup

  • Click Lists from top of QuickBooks Desktop menu and then select the Payroll Item List.
  • Click Payroll Item and select New.
  • Choose Custom Setup and click Next
  • Select Deduction and Press Next.
  • Put an item name in Enter name for deduction box and click Next.
  • Open Liability account dropdown to select the account which will be used to track deduction and then click on Next.
  • Now select the tax tracking-type classification according to your plan from Tax Tracking Window and click Next.
  • Put a checkmark on any item in the Payroll Item column which will be calculated after deduction and then click Next.
  • Select Neither in Calculate Based on Quantity and click then press Next.
  • If the Gross vs. net window appears: Select gross if the amount deducted is the percentage of gross earnings. Select Net, if it is a fixed dollar amount. The tax calculation of an item is based on tax tracking type selected, not by gross vs. net calculation and click Next.
  • If a similar deduction rate or amount applies to most of the employees then put it in the field at the top of Limit Type. If there is any annual deduction limit, it should be entered into the lower field only if the limit is the same for all or most employees.
  • Click on Finish to complete the process.

How To set Up A Retirement Plan Company Contribution Item Using Custom Setup?

If you want to set up company contribution of retirement plan in QuickBooks using custom setup, then you can follow the below mentioned steps:

  • Click Lists from top of QuickBooks Desktop menu and then select the Payroll Item List.
  • Click Payroll Item and select New.
  • Choose Custom Setup and hit Next
  • Select Company Contribution and press Next.
  • Now enter a name for contribution and then click on Next. (Avoid the name which is used for employee deduction.)
  • Select the earlier chosen liability account from the Liability Account drop-down list.
  • Choose an expense account from the Expense account drop-down list, and click Next.
  • Select the tax tracking-type classification according to your plan from the Tax Tracking Type
  • If the similar contribution rate or amount is given to all or most of the employees, then put it at the top of the Limit Type
  • Click on Finish button to complete the payroll item setup for the company contribution in QuickBooks.
  • If the contribution amount varies for some employees then edit the contribution amount from respective employees.

How To Add The New Payroll Items To The Employee Record?

In order to add a new payroll item to the employee records, you can follow the below-mentioned steps:

  • Open QuickBooks Desktop and click on Employees from the top of the menu and then select Employee Center.
  • Now double click on Employee to open Edit Employee window.
  • Click on the Payroll Info
  • In the Additions, Deductions and Company Contributions section:
    • Click under Item Name to open the drop-down list.
    • Next, choose the new payroll item(s) for the retirement plan(s).
  • Mark the box for Employee is covered by a qualified pension plan, if the employee participates in a 401(k), 403(b), 408(k)(6) SEP, or SIMPLE IRA plan.
  • Click OK.
  • Repeat this process for each eligible employee.

Need Any Help? Contact The QuickBooks ProAdvisors

Technical Help For QuickBooks Payroll 401K Setup

Now you can easily set up 401(k) in QuickBooks with the help of the above methods. If you need any assistance in performing above steps then you can call to QuickBooks Tech Support Number +1888-528-1015. You can also contact on Live QuickBooks Chat Support. Our technical advisors are available 24×7 to resolve any kind of QuickBooks errors or issues.

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