Quicken Mac needs a wizard to handle two types of IRA withdrawals & RRIF accts (29 Legacy Votes)

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  • Gilles9
    Gilles9 Windows Beta, Mac Beta Beta
    edited September 2023
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    I need to withdray amounts from my RRIF yearly, so it gets transfers from one accountt to another

    Now the problem is that it does not show as an Income, which it is for tax purposes,

    I do I make it show as an income ( ex: RRIF Income ) category in my reports

    It seems there is a way in Quicken forWindows not in Quicken for Mac

    Please add a possibility to add a Category when transferring amounts out of an RRIF

    Thanks

    [Merged Post]

  • jacobs
    jacobs SuperUser, Mac Beta Beta
    edited September 2023
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    Quicken Mac lacks any built in mechanism for dealing with taxable withdrawals from retirement accounts. I'm not well acquainted with Canadian RRIF accounts, but I believe they are similar, for tax purposes, to IRA accounts in the US, where withdrawals are taxable income.

    For taxable IRA withdrawals, I use a hack to accomplish what you're looking to do. First, the transfer from the retirement account to the non-retirement account is merely a transfer of funds between accounts, so Quicken doesn't treat a transfer as income or expense. So then you need to recognize the taxable income. My hack is to do a separate transaction, or to add split lines to the transfer transaction, to create the income. I do this by having one split line have a category of the taxable income (for you, RRIF Income), followed by another split line with the negative of the amount which uses the category "Adjustment". This is basically a way of creating income out of thin air, as the split with the income category creates the income for tax reporting purposes, and the split with the Adjustment offsets the income amount so the transaction amount nets to zero.

    I suggest you click on the Idea thread below and add your vote for it and add a post about having a solution which works for Canadian RRIF accounts as well as US IRA accounts.

    [Merged Post]

    Quicken Mac Subscription • Quicken user since 1993
  • Gilles9
    Gilles9 Windows Beta, Mac Beta Beta
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    I used the split transaction scenario, works OK, but as said not very elegant

    Yes it is like IRA withdrawal,

    I do not think it shoudl be difficult, just add a specific transaction in the brokerage accounts ( most RRIF and IRA are in Brokerage accounts, I suppose as Quicken does not allow a bank account to be set as RRIF ( and I suppose IRA )

    Thanks for the link to the suggestion

  • molterlynn
    molterlynn Member ✭✭✭
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    I'm unable to use Personal Income: Normal RMD Distributions - nothing shows up on the Tax Report, Cash Flow Report, Income Report, or any report that I can find.

    I found a workaround for myself, but I had to create a RMD Report using Tags in order to keep track in Quicken.

    PLEASE, make the category useful - Total RMD Distribution, Federal Tax Withheld, State Tax Withheld and on the Tax Report - 1099 R

  • jacobs
    jacobs SuperUser, Mac Beta Beta
    edited April 16
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    @molterlynn A moderator has merged your feature request into this existing Idea thread, which is already in "Under Consideration" status with the development team.

    In the meantime, there are a few ways to get your IRA distribution to be reflected correctly in Quicken's tax reports without using Tags. The problem is that because Quicken Mac doesn't yet have a specific feature for this, and by default, Quicken's tax reports exclude retirement accounts (because income earned in a retirement account, like dividends, interest and capital gains, isn't taxable income). you could modify the tax report to include the retirement account(s), but then you'll likely pick up investment income in the account(s) on the report, which is incorrect since that is not taxable income.

    There are two ways to make your RMD show up as taxable income to work around Quicken Mac not having a specific built-in way to do it. One requires two transactions to transfer the money, and the other requires a little hack. In both cases, you start by recording the sale of whatever security you sold to make the withdrawal, generating the cash for the distribution — which you said you already have in your IRA account. 

    In the first method, you enter one transaction in the IRA account as Type=Payment/Deposit for the amount of your withdrawal, and use Category=Transfer. This is not a linked transfer to the receiving account, just a generic "Transfer," a special category Quicken uses to make money appear or disappear without being income or expense. Then you enter a second transaction in the receiving account, a deposit (money-in) transaction using the category Personal Income > Taxable IRA Withdrawal (which is assigned to the proper 1099-R tax line for the Tax Schedule report). (So if you withdrew $10,000 from the IRA and had $2,000 with held for deferral taxes and $500 withdrawn for state taxes, you'd enter the deposit for the $7,500 you received, and have three splits lines for the $10,000 with Category=Personal Income > Taxable IRA Withdrawal, $2,000 for federal tax, and $500 for state tax.) It's this transaction in your checking account which will show up in your Tax Schedule report. It's funky, because the first transaction makes the money go out of the IRA account without specifying where it went, and the second transaction in the checking account records income without specifying where it came from — but both accounts have the correct balance and the taxable income is recognized.

    In the second method, which is what I use, you use a linked transfer to show the movement of money between the two accounts; but because transfers can't be income or expenses, you then need to manufacture the taxable income. This sounds a little more complex, but it's pretty simple:

    1. In the checking account, create a transaction to Transfer the cash out of the IRA account into the receiving account. It's important to create this transfer in the non-retirement account, transferring money in from the IRA account, not from the IRA account transferring money to the non-retirement account. (You'll see why in a second.) As above, with withheld taxes, the transaction is a split. So if you withdrew $10,000 from the IRA and had $2,000 with held for deferral taxes and $500 withdrawn for state taxes, you'd enter the deposit for the $7,500 you received, and have three splits lines for the $10,000 with Category="Transfer:[IRA account name]", $2,000 for federal tax, and $500 for state tax.

      That transfer transaction gets both accounts to have the correct dollar amounts: the IRA account is back to a zero cash balance, and the receiving account has the correct cash received. But because Quicken Mac does not include IRA account transactions in the Tax Schedule report, the amount of the RMD — which is taxable income — does not show up on the Tax Schedule report. So here comes the hack…
    2. In the same transaction in the receiving account which does the transfer, add two more split lines:
      • Use Category="Personal Income:Taxable IRA Withdrawal", which is assigned to the proper 1099-R tax line for the Tax Schedule report, with the amount of the total RMD withdrawal (e.g. $10,000 in my example).
      • Use category="Adjustment" or for the negative of the same amount. (e.g. -$10,000).

      "Adjustment" is a special category in Quicken Mac which makes money appear or disappear without showing up in any report. So in this approach, one split line creates the taxable income which is needed for the tax report, and the adjustment split line makes that money come from nowhere by keeping the transaction amount unchanged. This is how to work around the transfer from the IRA account not being able to also have an income category.

    That sounds crazy complicated but it's still just a single transaction with several split lines. Best of all, once you enter one such transaction, for future IRA withdrawals, you can duplicate it and just adjust the date and amounts.

    Quicken Mac Subscription • Quicken user since 1993
  • Quicken Anja
    Quicken Anja Moderator mod
    edited June 21
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    Hello @molterlynn,

    Your idea has been merged into this already active Idea thread regarding the same topic.

    Thank you!

    -Quicken Anja
    Make sure to sign up for the email digest to see a round up of your top posts.

  • JoelAlbert
    JoelAlbert Member ✭✭
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    Adding a Vote as well !

    It's puzzling why such functionality doesn't exist. FWIW I think the Wizard needs to handle a number of cases:

    • Roth Conversions using Cash (with/without Taxes)
    • Roth Conversions using Assets (with/without Taxes)
    • IRA Withdrawals/RMDs using Cash (with/without Taxes)
    • IRA Withdrawals/RMDs using Assets (with/without Taxes)

    I have to implement a series of kluges to properly record things and would like a much more straightforward solution.

  • Concordman
    Concordman Mac Beta Beta
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    Adding my vote here as well definitely needed for Annuity transfers and upcoming RMD's