401k Employer Contribution

I've read some of the threads on this, but I'm still not sure how to handle it. I'm using Quicken 2006 Premier. In my split paycheck, using the wizard, I entered a Pret-Tax 401k Contribution deduction with an Employee Match. My problem seems to be that, Quicken is reducing my tax liability by the amount of my employer contribution.

So it looks like this:

Salary 1000 My contribution to 401k -100 Employer contribution to 401k -50

Taxable Income 850

Any ideas on how to to tell Quicken not to reduce my tax liability as it pertains to my employer match?

Thanks for the help.

Reply to
hrmascioli
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Sorry; I meant to say "Employer Match" not "Employee Match"

Reply to
hrmascioli

Your employer contributes untaxed money into your 401(k) account. You will not owe any tax on the $150.

Reply to
Stubby

Just checking - your employer's match shows up somewhere on YOUR paycheck that you need to split it out from your own contribution?

Reply to
Andrew

Thanks for your reply. My contribution ($100) reduces my tax liability, as it should, however I do not believe that the Employer Contribution should reduce my tax liability. Right now, the Tax Planner appropriatly reduces my contribution, but it also reduces my total tax liability by subtracting the Employer match ($50), I don't believe the Employer match reduction is correct.

thanks.

Reply to
hrmascioli

You are correct in that the Employer Match does not affect tax liability.

Suggest you run QW's Tax Schedule Report and see if QW is properly handling this info for tax reporting purposes. Look at the entries under the W-2 header in this report and you should see gross salary/wages followed by a debit for your (Employee) contribution. The employer match should not show up in this report.

Some users have reported various problems with the Tax Planner feature and this may be one of them.

Reply to
JM

JM,

Thanks; the W-2 for Salary or wages, self does show up as follows: Employer Match [401k] -50. So I interpret this to mean a debit, right?

thanks.

Reply to
hrmascioli

Andrew,

My paycheck does not reflect a matching contribution. My employer deposits the matching contribution directly into my 401k account. Am i interpreting from your comment that I should add some type of miscellaneous income entry offseting the Employer contribution?

thanks.

Reply to
hrmascioli

show up in the tax reports.

In using the wizard to set the paycheck up, you enter your (Employee) contribution as a Pre-Tax deduction. The pop-up window to enter this contribution has boxes to enter both your contribution and the employers match. Is this where you entered the employer match?

Match as a separate Pre Tax deduction.

Reply to
JM

Andrew,

Actually, the Employer match does not show up in my paycheck. It goes in directly as a deposit into my 401K account. But, are you saying that I should make some kind of miscellaneous entry as income for their matching contributions. I'm not sure if I'm interpreting your comment right. This match does not show up as income in my paycheck.

thanks.

Reply to
hrmascioli

JM,

Yes; I used the wizard to enter my paycheck. The entry is under Pre-Tax Deductions. The Pop-Up window contains the following:

Name: Employee Contribution Transfer Account: 401k Contribution: 100 Employer Match: 50

Thanks again.

Reply to
hrmascioli

Having read the other posts in this thread, it seems to me you left out an important point in this, your intial, post: you seem to be speaking only of the Tax Planner. The paycheck wizard computes your W2 Gross correctly (at least it does mine). And as JM indicated, Quicken's Tax Reports seem to get it right.

There have been quite a few posts (here and in the Intuit Quicken forums) about the tax planner - and other Quicken planners as well - that indicate the planner has some problems. I do not think you are going to be able to fix those problems with any user initiated action.

Reply to
John Pollard

John

"Thanks; the W-2 for Salary or wages, self does show up as follows: Employer Match [401k] -50. So I interpret this to mean a debit, right?"

The OP indicates that the Employer Match is showing up in the Tax Schedule Report as a reduction of gross - this is not correct .

I'm using a test file to try and trouble-shoot this and I see no such problem with the Tax Sched Rept. ??

Any further thoughts?

Reply to
JM

Yes: if op has assigned the W2-Salary tax schedule line to the _401EmployerContrib category, it will show up as described.

Reply to
John Pollard

Good thought!

OP - per JohnP's reply here, check for tax line assignment for category '_401k EmployerContrib'. It should be blank - no tax line assignment.

Reply to
JM

JM,

As you guys were talking it occured to me to go and do that. It was checked and now I checked it off. Is there a way now to go back and rectify my year to date entries, or this something that only takes effect from now on?

Great advice!; thanks!

Reply to
hrmascioli

Was(is) there a tax line assignment for the category '_401k EmployerContrib'? There should not be one.

Is your Tax Schedule Report now correct?

If so, you do not have to correct any previous entries for proper tax reporting.

This does not speak to possible problems with the Tax Planner - there are 'bugs' in the Tax Planner and this may be one of them.

I have found the Tax Schedule Report to be very reliable - and critical in my use of QW.

Reply to
JM

JM,

The _401k EmployerContrib is not checked nor is it associated with any tax forms, however the Tax Schedule Report continues to show a debit. I did a check with the Chat Support in Quicken and they said that they saw the same thing and referred me to some investment support number for help.

So, I'm running out of options.

Thanks.

Reply to
hrmascioli

Do you have the 401k account set up as a QW defined 401k or do you have it set up as a tax-deferred brokerage account?

Reply to
JM

JM,

OK; Here is the latest. I removed the Tax Schedule Information from my

401k account and all is apparently well now. The debit entry from the Tax Schedule Report is no longer visible and my gross tax liability is now correct. Basically, I blanked out the Transfer In and Transfer Out entries from the Tax Schedule Information. Quicken recommends for a 401k account to associate Transfer In to " Salary or wages, self" and Transfer Out to "Form 1099R: Total Pension Gross Distrib"

Oh well; thanks for your time!

Reply to
hrmascioli

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