Payroll Svc Employee 401k Contribution

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#1
Bob A  
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A well known Payroll Service generates negative checks and "unknown" checks and journal entrees with notations such as "shortfall" and "box 1 only" on Oct 2020 and on Dec 2020 payroll reports apparently in order to generate an employee 401k contribution for the year and for the payroll reports themselves. In the meantime, the S Chapter (employer) makes direct payments from it's bank account to the 401k Administrator in order to make good on these "employee contributions." A proper looking W-2 is generated. Anyone familiar with this type of routine?
 

#2
sjrcpa  
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Not particularly but they must be directed by the employer, and/or they are correcting a mistake from a previous payroll run.
 

#3
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Is there any chance it could have been something to do with Roth 401(k) contributions and has that been done correctly?
 

#4
Bob A  
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SumwunLost wrote:Is there any chance it could have been something to do with Roth 401(k) contributions and has that been done correctly?


I don't think it's Roth. It's a straight 401k employee contribution "effort" to make it appear the employee/officer is making a payroll contribution..... gross payroll less fed w/h less med, less soc sec then the net check on 26 bi-weekly payrolls. And then this craziness, apparently designed to make the W2 appear as routine; 401k Box 1 is less then Box 3 as if the retirement contributions had actually happened via payroll, but it didn't, other than the S did actually send the funds...... how to account for this? how to transact on the funds leaving the business bank in support of satisfying a 401k payable that doesn't exist...
 


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