So, you decide to invest in your future and open a retirement account, now what? As an employee of your S Corp, you'll benefit from lower taxable income and/or deferred taxes. If you are still deciding which plan is best for you, check out this article.
You'll need to run your retirement contributions and deductions through payroll for W-2 reporting purposes. Ready to set up your retirement account in Gusto?
12/15/20 Update: Do not use this for Traditional and Roth IRA setups. If you have a Traditional and Roth IRA, they will go to your personal return, No need to run contributions through your business.
In Gusto, you would go to Benefits:
Select 401(k) under Add benefits
Select Yes - we currently offer Traditional or Roth 401(k) to your employees
Click I’ll Manage 401(k) myself
Input Benefit Name (Keep it generic: 401k)
Benefit Type: select 401(k) or Roth 401(k)
Employee deduction per pay period: Select either percentage of gross pay or a fixed amount: input your employee deduction based on your 401(k) details. This is the amount Gusto will deduct from your employee's wages each pay period (if applicable)
Annual deduction limit: Select Use standard limit (The catch-up contribution limit is for employees aged 50)
Company contribution per pay period: Select either a percentage of wage or a fixed amount: enter your company contribution based on the 401(k) details
Annual maximum contributions: The maximum amount that your company can contribute for the year.
How will I make my contributions?
You’ll make your contributions from your business checking or credit card account. Gusto does not remit payment to third-party service providers, so please ensure you make these payments yourself.
What if my contributions exceed the annual limits?
The system will prevent you from contributing above the max for the year.
How are my contributions going to be recorded in QuickBooks?
Sync the information in Gusto to Quickbooks by mapping it in Settings > Integrations
When the data syncs to QBO, you will categorize the payment you made as Payroll Liability
How do I add retirement deductions and contributions retroactively?
Questions? Reach out to your Collective team in Slack 😄