[GNC] PayCheck, 401k, Accounts Setup Help

[Stan Brown]

Hi, Jimmy!  Welcome to GnuCash.

Have you looked at the Guide yet? That may orient you to what GnuCash
can and cannot do. For the super-short version: it is a double-entry
accounting system, meaning that every transaction must be balanced
between debits and credits.

Roughly, debits = assets and expenses; and credits = liabilities,
equity, and expenses.

Most questions about how to enter something in GnuCash boil down to
which account(s) will get debited and which will get credited in that
transaction. (By the way, each line-item within a transaction is called
a "split," a name that caused me some confusion initially.)

Your transaction, for each paycheck, would be something like this, but
using your own account names of course:

Debit to  Assets:Cash (or Assets:YourOwnBankAccount if you're breaking
accounts down that far)
Credit to Income:Salary
Debit to  Expenses:FederalTax _or_ Liabilities:FederalTax(*)
Debit to  Expenses:StateTax _or_ Liabilities:StateTax(* see below)
Debit(s) to Expenses:Insurance (presumably broken down by type)
Debit to   Assets:401(k)
Debits to accounts representing your "etc."

You can see that all this balances: the Credit (your salary) equals the
sum of Debits (your check and all your withholdings).

I would do the 401(k) match as a separate transaction:
Debit to  Assets:401(k)
Credit to Income:Employer401(k)Match

(*) There are two schools of thought on handling withholding taxes if
you are a cash-basis taxpayer, as you most likely are.

Option A: Record all withholdings in the Expense:Tax accounts. When you
get your tax refund, record the overpayment this way:
Debit to  Cash or BankAccount
Credit to Expenses:Tax
If you underpaid and have to send a check, reverse the above debits and
credits.

Option B (which I recommend if you have to file estimated taxes):
Establish one or more liability accounts for your types of taxes
payable. When you have withholding or make an estimated payment, you
debit those accounts (reducing their balances). Monthly or quarterly,
when you compute your estimated taxes -- which will not necessarily
equal the amount you actually spend -- debit the Expense:Tax accounts
and credit the Liability:Tax accounts.

Either way you end up the same at the end of each tax year: the
Expense:Tax accounts end up showing your total tax for the year, and the
Liabilities:Tax accounts (if you're using them) end up at zero.


-- 
Regards,
Stan Brown
Tehachapi, CA, USA
https://BrownMath.com
http://OakRoadSystems.com

On 2020-03-29 07:12, Jimmy Lee wrote:
> I'm new to GnuCash, coming over from Mint.  Does anyone have a tutorial,
> preferably graphical, to show how to enter something similar to the
> following in GnuCash?
> 
> 1. I get paid twice a month.
> 2. There are taxes, insurance, 401k, etc taken out of the paycheck.
> 3. My employer matches 4% on the 401k contribution.
> 4. I can either wait on my statement or I can log into the 401k site to
> enter the shares purchased and @ what price they were purchased.
> 5. I have an additional amount deducted from the paycheck to go to
> Fidelity for automated purchases in a personal investment account.
> 6. Purchases of mutual funds and ETFs are made once a month on the 22nd.