Handling A SEP IRA Contribution?

SEP IRAs retirement plans similar to 401Ks except that the company makes 100% of the contributions. There are numerous requirements that are well documented elsewhere on the Internet, but I can' seem to find any assistance regarding how to handle SEP IRA contributions from a bookkeeping standpoint. It seems like there are two main scenarios:

* A SEP IRA contribution made for the current fiscal year
* A SEP IRA contribution made for the previous fiscal year

In the first case, my assumption is that I'd create a "SEP IRA Contributions" expense account and debit it for any contributions made for the current fiscal year. Is that correct?

In the second case, my assumption is that I should use a different expense account for contributions made for the previous fiscal year, maybe call it "Previous FY SEP IRA Contributions"

Am I even close here? Are there standard names that should be given to these accounts?

Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Bookkeeping Questions and Answers.


Please subscribe to my monthly newsletter, Bookkeeping Basics E-zine. It tells you each month about the new information that I have added, including some great tips and advice from myself and other Bookkeeping Basics readers.


Enter Your E-mail Address
Enter Your First Name (optional)
Then

Don't worry — your e-mail address is totally secure.
I promise to use it only to send you Bookkeeping Basics E-Zine.


Like Bookkeeping-Basics.net?