Discussion:Recording safe harbor 401(k) contribution
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Discussion Forum Index --> Tax Questions --> Recording safe harbor 401(k) contribution
| 10 January 2007 | |
| How do you reflect cash contributions that will be made for a safe harbor 401(k) in march 2007 on 2006 financial statements of a cash basis LLC? | |
| January 10, 2007 | |
| Accrued 401K.
Cash basis doesn't matter on accrued taxes, retirement, etc. Credit cards.... | |
| 10 January 2007 | |
| In English, record a journal entry debiting "retirement plan expense", crediting "retirement contribution payable" (a current liability). When the retirement contribution is paid in March, debit the liability account rather than the expense account, since the expense has already been recorded in 2006. | |
| 10 January 2007 | |
| In English, I know how to record the entry. But the LLc is a cash basis company. I thought the expenses will be recorded when paid not when incurred! | |
| January 10, 2007 | |
| Go back and reread my post. Different horse, accruals and credit cards from usual payables. | |
| January 10, 2007 | |
| JR is correct. Some accruals can be made on the cash basis, such as, payroll taxes and retirement plan contributions that are for the prior year (in this case, 2006). Record these payables in 2006. | |
| 10 January 2007 | |
| Toubi, sorry to offend. Since your profile has NOT been filled out (hint), I did not know whether your are a tax person yourself or a do-it-yourselfer preparing his/her own return. JR's answers, while usually right-on, are sometimes cryptic. He is correct that this accrued expense is allowable even for a cash basis taxpayer. | |
| January 10, 2007 | |
| Cryptic? Now what the heck does THAT mean? Talk about cryptic.... | |
| 10 January 2007 | |
| Thank You Deback. I have also updated my profile.( For Jdugancpa's information.) | |
| 10 January 2007 | |
| JR, lighten up :) I have nothing but high regard for all of your posts. Your answer above, while correct, IMHO was a little too brief if one assumed the question came from someone not very familiar with accounting and taxes.
Gosh, I've offended to people in one message thread. I'd better stop now. Humble apologies to any and all. | |
| January 10, 2007 | |
| Am light, jess having some fun...so you only offended one apparently. Now go find someone else to try on... | |
| 10 January 2007 | |
| I see my English isn't so great either: "I've offended to people"??? | |
| 12 January 2007 | |
| Security deposits paid to the landlord ,if is not applied toward the last month rent ,is another example of the liabilty that can be shown on the books of a cash-basis tax payer. | |
| 12 January 2007 | |
| Security deposits paid to the landlord ,if is not applied toward the last month rent ,is another example of the liabilty that can be shown on the books of a cash-basis tax payer. | |
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