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
Reply to
thefronny
wrote
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.
Reply to
Paul Thomas, CPA

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
Reply to
thefronny
wrote
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.
Reply to
Paul Thomas, CPA

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