Bookkeeping Account for Solo Roth 401K Contributions? | Ed Slott and Company, LLC

Bookkeeping Account for Solo Roth 401K Contributions?

I am not sure if it is appropriate to ask here since this isn't an IRA I'm talking about.

I just setup a Solo Roth 401K plan with Vanguard, for my single participant sole proprietorship.

I understand I should be linking my business checking account instead of personal checking account since the contribution is made by the employer login on Vanguard.

Before the retirement account, the way I got money out of my business books was to DEBIT "Owner's Draw" equity account and CREDIT my business checking account -- transferring the money from business checking to personal checking.

So what account should I use since I don't want to do an Owner's Draw anymore? -- I want to put every cent I can into the 401k. Should I create a new equity account called "Roth 401k Contributions" ? I'd then DEBIT that account and CREDIT business checking for each contribution -- transferring the contribution from business checking to Vanguard Roth Solo 401k account.


Find members of Ed Slott's Elite IRA Advisor GroupSM in your area.
We neither keep nor share your information entered on this form.

I agree to the terms and services:

You may review the terms and conditions here.