How to record 401k contributions

How do I record my wife's 401k contributions? It comes out of her gross pay but we don't see it in the checks. Furthermore here employer matches her contribution. How do I set this up in a double entry
system?
thanks,
tf
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

And you won't. It's a deduction that is sent to the investments inside the 401K.
Just be sute to track her withheld amount and verify that it gets deposited into the 401K investments.
At a minimum there are annual or quarterly reports that should show the detail.

If the matching amount is subject to vesting, then it may be held in separate accounts and not be directly reflected in any reports she recveives.

What's the purpose behind your accounting? What do you hope to accomplish with the end reports.
I can see tracking her withheld amounts to the deposited amounts in her 401K investments. Beyond that, the account value is what matters. So to have your booked entry for withheld amounts match the value of the account at the end of any given period, you'd have to have another account for "fake gains or losses" to balance your accounting to the value.
If the matching is subject to vesting, what do you track and where? If the company puts in $6,000 in matching but it's 20% vested, what entry do you make? The matching, if subject to vesting, may not even be in her account.
If she receives paystub reports each pay period, then hold those till the 401K reporting comes out and match up the deposits to the withholdings. Beyond that you're going to go bald quickly trying to book entries upon entries.
--
Paul A. Thomas, CPA
Watkinsville, Georgia
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Paul Thomas, CPA wrote:

All I wanted to do was track the initial deductions and matching contributions "at the moment." I wouldn't think of stacking up phony credits and debits trying to match gain or loss of "value" going forward (the balding part is important.) I never thought of the vesting part. Thanks for that.
tf
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

In today's economy, especially in today's economy, you want to track the withholdings to the deposits to be sure her portion is made.
Probably an excel spreadsheet to track the withholding amount, deposited amount (which may or may not include the matching) and the account balance every now and then. Might be interesting in the future to see how much of the account balance is from her contribution, how much is from company matching, and how much is from earnings of the investments.
--
Paul A. Thomas, CPA
Watkinsville, Georgia
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Site Timeline

BeanSmart.com is a site by and for consumers of financial services and advice. We are not affiliated with any of the banks, financial services or software manufacturers discussed here. All logos and trade names are the property of their respective owners.

Tax and financial advice you come across on this site is freely given by your peers and professionals on their own time and out of the kindness of their hearts. We can guarantee neither accuracy of such advice nor its applicability for your situation. Simply put, you are fully responsible for the results of using information from this site in real life situations.