This learn QuickBooks for home financed video will show you how to record retirement fund contributions in to QuickBooks and retirement funds deductions from your retirement account. All these I.R.A., S.E.P. or other retirement funds must be recorded in to your home finance records.
Retirement funds behave differently from normal bank accounts when keeping records with QuickBooks for non-business family or trusts and Estates.
Normally, when a bank account increases, you would only record income as the reason and, normally when a bank account decreases, you would record some expense.
However, when your retirement fund increases, you are contributing to the retirement account and must record in to QuickBooks that you are deducting what you put into the fund and it’s lowering your net taxable income. Things like: I.R.A. contributions can be recored
At the same time, your net worth is increasing when you put money in because you have more money in an additional bank account in your possession that counts as your retirement fund.
When the retirement fund decreases, it’s actually included as taxable income when you withdraw from an I.R.A. or an S.E.P. This is a taxable withdrawal your net worth is lower because there is less money in the retirement account.
Because the rules of taxes are different from the rules of generally accepted accounting principles, the way that retirement funds behave regarding your income tax has a double effect. The effect on your income profit and loss statement for taxable and non-taxable income will make your taxable income decrease for the amount that you deposit into the retirement fund and it will make your taxable income increase when you withdraw money from the retirement fund.
Additional to that effect is the effect on your assets and net worth.
When you put money into a retirement fund you have an additional asset and since you own that asset your net worth goes up.
Of course, the opposite balance sheet effect is true if you withdraw money from a retirement fund you have less value of your bank account. So, your net worth goes down.
Therefore, every transaction with a retirement fund, whether it be a deposit or a withdrawal, must be recorded twice. It will be recorded once for the effect on your personal balance sheet and then once for your profit and loss / income statement to help calculate and estimate your non-business taxable net income.
This QuickBooks training course within this play list, will show you how to completely manage every aspect of your personal home finances using the Desktop version of QuickBooks. It really is better than Quicken, or any other software in regard to keeping records of non-business home finances. These easy, step-by-step QuickBooks training lessons show you how to handle area of finances that individuals, families, trust or estates would need to keep financial records for. This easy and fun little QuickBooks course will give you the ability to evaluate your financial position and understand how well you are doing over any period of time. You can even compare how well you did for specific time periods. There are several of features in QuickBooks that will make personal financial management work perfectly for you by using QuickBooks desktop.
I’m right here for you if you have any questions or need support. You can leave your questions in the comment section and I will do my best for you. I hope you learn well and enjoy the course!
-Mark

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Recording Retirement Fund Transactions in QuickBooks Home Finance

Managing your retirement funds is an essential aspect of personal finance. As you plan for your golden years, it is crucial to keep track of your retirement fund transactions accurately. QuickBooks Home Finance is a powerful tool that can help you efficiently record these transactions and monitor your retirement savings.

Here are some steps to guide you on how to record retirement fund transactions in QuickBooks Home Finance:

1. Create an Account: Start by setting up a new account specifically for your retirement fund in QuickBooks Home Finance. Go to the Chart of Accounts section and click on “New” to add a new account. Choose the appropriate account type, such as a bank account or an investment account, depending on the nature of your retirement fund.

2. Set Up Opening Balance: If you have an existing retirement fund, you need to enter its opening balance to accurately reflect its current value. Enter the date when the retirement fund was opened and input the opening balance amount. This step is crucial to establish a baseline for tracking transactions going forward.

3. Record Contributions: Whenever you contribute to your retirement fund, record it as a deposit transaction in QuickBooks Home Finance. Select the retirement fund account, enter the contribution amount, and specify the date and source of the funds. This will help you track your total contributions over time.

4. Record Investment Gains or Losses: Retirement funds often grow through investment gains and may fluctuate due to market conditions. If your retirement fund experiences gains or losses, record them as either income or expenses in QuickBooks Home Finance. This will provide a clear picture of how your investments are performing.

5. Track Fees and Charges: Your retirement fund may have administrative fees or charges associated with managing the account. Record these expenses in QuickBooks Home Finance as well. By tracking fees, you can evaluate their impact on your overall retirement savings.

6. Monitor Distributions: When you withdraw funds from your retirement account, whether for living expenses or other purposes, record these distributions in QuickBooks Home Finance. Deduct the withdrawal amount from your retirement fund account and specify the date and purpose of the distribution. This will help you keep track of your post-retirement income.

7. Reconcile and Review: Regularly reconcile your retirement fund account in QuickBooks Home Finance to ensure that your recorded transactions align with the actual account statements from your retirement fund provider. This practice will help you identify any discrepancies and improve the accuracy of your financial records.

Utilizing QuickBooks Home Finance to record retirement fund transactions allows you to gain better visibility into your retirement savings, understand the sources of growth or potential losses, and effectively plan for the future.

Remember that it’s essential to consult with a financial advisor or retirement planning professional for guidance on managing your retirement funds efficiently. They can provide personalized advice tailored to your specific financial goals and circumstances.

With the right approach and tools, such as QuickBooks Home Finance, you can take control of your retirement savings and work towards achieving a financially secure future.