I am receiving 401k and IRA distributions which are taxable. How do I input these so that Quicken r

Unknown

I am receiving 401k and IRA distributions which are taxable. I don't know how to input these so that Quicken recognizes them as income. How do I do it? Thanks.

q_lurker

You input the transaction as a transfer of funds from the 401k account to your "other" account - checking, investment, etc.

The settings for the 401k account details should have that transfers out are treated as taxable income.  Applicable "tax" reports will pick those transfers up and report accordingly.  

Outside of the taxation issue, the transfer is not really income.  It is moving a 401k asset to a 'Checking account' asset -- from one pocket to another.

As I recall, it is recommended that the transfer be initiated from the receiving account and therein record it as a split transaction with the gross amount withdrawn from the 401k and the withheld tax amount recorded as a second line such that the net amount of the transaction into the checking account is the net (gross less tax withheld) amount.  That way the tax withheld will also be found for applicable tax reports.

HTH

Jim_Harman

If you are tracking the 401k and IRA accounts in Quicken, the distributions should be set up as transfers to other accounts. Go to the Account Details for each tax deferred account click Tax Schedule at the bottom, and for Transfers out select 1099-R: Total IRA Gross Distrib.

This tells Quicken that the distributions should be treated as taxable IRA distributions, and they will show up as such on your tax reports and elsewhere.

If you are not tracking the 401k/IRA accounts in Quicken, you should set up an Income category called IRA Distributions or something similar and assign it the same tax category.

Unknown

q.lurker said:

You input the transaction as a transfer of funds from the 401k account to your "other" account - checking, investment, etc.

The settings for the 401k account details should have that transfers out are treated as taxable income.  Applicable "tax" reports will pick those transfers up and report accordingly.  

Outside of the taxation issue, the transfer is not really income.  It is moving a 401k asset to a 'Checking account' asset -- from one pocket to another.

As I recall, it is recommended that the transfer be initiated from the receiving account and therein record it as a split transaction with the gross amount withdrawn from the 401k and the withheld tax amount recorded as a second line such that the net amount of the transaction into the checking account is the net (gross less tax withheld) amount.  That way the tax withheld will also be found for applicable tax reports.

HTH

Right now I have an annuity distribution that deposits into my checking. I use a transfer from my annuity account to match the deposit. It does not show as income but a transfer. Its an income distribution with tax withholding. How do i set this up to show income?

mshiggins

q.lurker said:

You input the transaction as a transfer of funds from the 401k account to your "other" account - checking, investment, etc.

The settings for the 401k account details should have that transfers out are treated as taxable income.  Applicable "tax" reports will pick those transfers up and report accordingly.  

Outside of the taxation issue, the transfer is not really income.  It is moving a 401k asset to a 'Checking account' asset -- from one pocket to another.

As I recall, it is recommended that the transfer be initiated from the receiving account and therein record it as a split transaction with the gross amount withdrawn from the 401k and the withheld tax amount recorded as a second line such that the net amount of the transaction into the checking account is the net (gross less tax withheld) amount.  That way the tax withheld will also be found for applicable tax reports.

HTH

Take a look at the FAQ post for handling distributions from an IRA. You would use a similar method for a pension or an annuity.


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Tom Young

Unknown

Jim Harman said:

If you are tracking the 401k and IRA accounts in Quicken, the distributions should be set up as transfers to other accounts. Go to the Account Details for each tax deferred account click Tax Schedule at the bottom, and for Transfers out select 1099-R: Total IRA Gross Distrib.

This tells Quicken that the distributions should be treated as taxable IRA distributions, and they will show up as such on your tax reports and elsewhere.

If you are not tracking the 401k/IRA accounts in Quicken, you should set up an Income category called IRA Distributions or something similar and assign it the same tax category.

Thanks, that was helpful.

But why choose "1099-R Total IRA gross distrib." rather than "1099-R Total IRA taxable distrib."? It is taxable, after all.

J_Mike

Jim_Harman

Jim Harman said:

If you are tracking the 401k and IRA accounts in Quicken, the distributions should be set up as transfers to other accounts. Go to the Account Details for each tax deferred account click Tax Schedule at the bottom, and for Transfers out select 1099-R: Total IRA Gross Distrib.

This tells Quicken that the distributions should be treated as taxable IRA distributions, and they will show up as such on your tax reports and elsewhere.

If you are not tracking the 401k/IRA accounts in Quicken, you should set up an Income category called IRA Distributions or something similar and assign it the same tax category.

Usually the way you enter these distributions in Quicken is to show the full amount of the distribution before any tax withholding as the amount transferred to another account. In the receiving account, you split the transaction to show any taxes that were withheld, with the net amount deposited to the receiving account. 

If you know the distribution is taxable, "taxable distrib." is best, as JM points out above. The "gross dsitrib" can be used if for example this might be a rollover to another IRA. 

Sherlock

Jim Harman said:

If you are tracking the 401k and IRA accounts in Quicken, the distributions should be set up as transfers to other accounts. Go to the Account Details for each tax deferred account click Tax Schedule at the bottom, and for Transfers out select 1099-R: Total IRA Gross Distrib.

This tells Quicken that the distributions should be treated as taxable IRA distributions, and they will show up as such on your tax reports and elsewhere.

If you are not tracking the 401k/IRA accounts in Quicken, you should set up an Income category called IRA Distributions or something similar and assign it the same tax category.

The tax lines refer to box 1 and box 2a on the 1099-R form: https://www.irs.gov/pub/irs-pdf/i1099r.pdf

Unknown

Jim Harman said:

If you are tracking the 401k and IRA accounts in Quicken, the distributions should be set up as transfers to other accounts. Go to the Account Details for each tax deferred account click Tax Schedule at the bottom, and for Transfers out select 1099-R: Total IRA Gross Distrib.

This tells Quicken that the distributions should be treated as taxable IRA distributions, and they will show up as such on your tax reports and elsewhere.

If you are not tracking the 401k/IRA accounts in Quicken, you should set up an Income category called IRA Distributions or something similar and assign it the same tax category.

Thanks, all!

Jim_Harman

Sherlock

Jim Harman said:

If you are tracking the 401k and IRA accounts in Quicken, the distributions should be set up as transfers to other accounts. Go to the Account Details for each tax deferred account click Tax Schedule at the bottom, and for Transfers out select 1099-R: Total IRA Gross Distrib.

This tells Quicken that the distributions should be treated as taxable IRA distributions, and they will show up as such on your tax reports and elsewhere.

If you are not tracking the 401k/IRA accounts in Quicken, you should set up an Income category called IRA Distributions or something similar and assign it the same tax category.

 I think the confusion comes because you have to pick gross or taxable for the transfer.  For a normal taxable distribution, both will be filled in with the same amount. 

If you really want both tax lines, you may use an escrow account (a second transfer with the taxable tax line assignment).

Unknown

J_Mike