Creating a Simple IRA or 401K (Standard or Roth)

To create a Simple IRA or 401K deduction:

  1. Open to the Payroll module inside of AccountEdge
  2. Click the Payroll Categories button on the top left of the Payroll module
  3. Click the Deductions Tab
  4. Click the green New button on the bottom left of the screen.
  5. This will open up a new deduction creation window.
  6. Type in the name of the deduction, so this way you can identify it easily when recording checks.
  7. By Default your Linked Payable Account should be filled in, if you wish to use a different account you can change this information here.
  8. Setup the Deduction Type and Deduction Limit
    • Under the first option Type of Deduction, you have three options User-Entered, Equals Percent and Equals A dollar amount
    • You will want to select the one that works for you, User Entered will require you to edit every check before recording and type in the amount you wish to deduct on the check. The percentage will take a fixed percentage based off of a Wage account, Typically Gross Wages. And the Dollar amount is off of a pay period, month, year or hour.
    • The Deduction Limit is going to be configured with the similar options but there is no user entered so its either No Limit, or the percentage or dollar amount.
  9. To assign this Deduction to an employee, Select the Employee Button on the bottom left corner of the Deduction Information Window, then you will see a list of all of the available employees. Simply placing a check mark to the left of the name of the employee will associate this category to them.
  10. To mark this as a pre or post tax deduction, we will now look at the Exempt Button
    • If you wish to make the 401k or IRA a Pre Taxed Deduction you will mark everything off (that should be marked off) as exempt on the list of Exemptions by placing a check mark next to the line item. Pre Tax works out to be the Gross Wages minus the 401k Deduction then the taxes are removed.
    • For a Post Tax Deduction, you will do the opposite of the above, you will go to the Exempt Button, and not select anything off in the list, making sure nothing has a check next to it. Post Tax works out to be the Gross Wages minus the tax amounts and then the Deduction is taken