Accounting a SEP IRA contribution for last year

ollllllloolllllllo Member Posts: 2

We started a single member LLC in 2019. Moved some amount toward SEP IRA for the year 2019 but it was done in Feb 2020. How do I account/categorize this transaction the right way without impacting the P&L & Balance reports?


  • MikegMikeg Member Posts: 772 ✭✭✭

    You would create a journal entry. First create a short term liability Pension Payable. Next debit Pension Expense or Employee Benefits and credit Pension Payable for the contribution amount. In 2020, you would categorize the transaction (payment of contribution) against the Pension Payable. Be sure to date your journal entry 12/31/2019.
    Keep in mind that the actual deduction for a SEP from a single member LLC is not on Schedule C but rather Schedule 1 of Form 1040.

    edited June 19, 2020
Sign In or Register to comment.