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Federal/state tax expense downloaded in investment accounts missing from category reports

Bob@63

Running Q-Mac 2018 v. 5.4.4 (Build 54.21024.100), I notice that tax withholding expenses in Vanguard investment accounts don't roll up into summary year-end expense-category reports. The transaction amounts download correctly, but I do have to manually assign the correct tax expense category to the taxes Vanguard withholds from my retirement account distributions. However, when I run year-end summaries for income & expenses, the withheld taxes from the investment account distributions don't appear in the total tax paid for the year.

There are various ways to work around this, but they involve manually transferring the gross distribution to my banking account, then charging each withholding amount (again manually) to the bank account. Very cumbersome and time-consuming and obviously non-optimal.

Any insights from Quicken on when this issue might be fixed?

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John Burgess

Is it an IRA account? What I’ve done with Ira withdrawals is enter a transfer to my taxable brokerage acct, and use splits on the table side to record the withholding. Not intuitive, but since IRAs are not taxable, I can understand why they are excluded from tax reports.

unknown

This is exactly what I do. Note the TXF export to TurboTax (or other Tax Apps) is broken. It includes all investment accounts even the non-taxable ones. So the TXF file would probably include your Federal and State withheld taxes but it also include all dividend and sells of securities. Not good. It makes the TXF export nearly impossible to use especially when you have hundreds of sells in your retirement account(s).

Bob@63

Here is a shot of one recent withholding transaction for a distribution from an IRA. It was downloaded as shown, with one exception: The category, as downloaded, was Tax:Fed, which I assume is a Quicken category I don't use. I changed the category to the custom one I use for this type of withholding: Taxes:CA Income Tax:RJR:IRA.

Bob@63

@John Burgess: Yes, it's an IRA account, but I'm puzzled by your comment about understanding why IRAs are excluded from tax reports. Or perhaps you aren't clear about how IRAs work. The money in them is indeed taxable, however it's tax-deferred until the money is actually withdrawn (or distributed). The owner of an IRA (or his or her heirs) will eventually pay that tax at the ordinary rate for the tax year in which the distribution is made, as well as penalties if the owner hasn't reached age 59-1/2.

Ordinarily, financial-services providers require withholding of applicable federal and state/local income taxes at the time the distributions are made.

I do hope the coders at Quicken have employed a higher degree of sophistication in writing the software for handling IRA accounts. :-)

Bob@63

Rick, I'm not using the Tax Schedule report. The particular report I'm generating is a Year-to-Date income and expense report, created at New Report ==> Summary Report ==> By Category, Interval = Month, with the date range set at 1/1/2017-12/31/2017. However, I am pretty certain that categorized expense charges recorded in any investment accounts are not rolled up in any reports, custom or standard.

The only workaround I've been able to come up with so far would be to enter the withholding charges manually as deductions from the gross proceeds of the distribution when they are transferred into my bank savings account. Those charges then scroll up into any reports I might need to generate through Quicken.

I've been hoping that Quicken Marcus or some other Quicken employee would acknowledge the need for a fix at some point, but of course I understand Quicken doesn't often provide such guidance.

I appreciate you offering your expertise. I took your advice to report it as a bug or design flaw via Help ==> Report a Problem.

John Burgess

Perhaps I wasn’t clear. Dividends, interest and capital gains within an IRA are not taxable, so for that reason IRAs are not included in Quicken’s annual tax reports.

Distributions are taxable, but because of th above if you record the tax on the IRA side of the transfer it isn’t included in the report, thus the accommodation to transfer the whole amount and record the tax in the non-qual account.

Bob@63

All correct. The problem here is that Vanguard (and I’ll wager most major financial-services companies) perform the actual withholding and report it to the government — and that’s reflected in the transaction downloaded from Vanguard. The work-arounds of recording the transaction in a banking account is not only time-consuming and cumbersome, they don’t reflect reality. Thanks for your comments on the subject.

unknown

I commented early about Export Tax Report being a problem. I just found out that you can generate a TXF file in two ways. One is from the File menu "Export Tax Report..." and the other is from within the "Tax Schedule" under Reports. On the Mac you should only use the TXF file generated from within the "Tax Schedule" Report. The one generated from under the File menu contains items from non-taxable Retirement accounts.

Bob@63

Rick, you're a masterful trouble-shooter. That works perfectly. The report now appears to include all transactions, including the custom ones set up for recording withholding from retirement accounts.

However, I hope you'll forgive me for being mystified about Quicken's controls for setting custom report parameters. Why does a report filter set to include/exclude transactions according to various parameters return ALL transactions only when NONE is selected for all parameters. Maybe I'm being obtuse here, but that strikes me as exactly contrary to what I would expect. Am I misunderstanding the workings of the filter controls? I'm happy with your solution, but it still seems reasonable to me that a report returning ALL transactions, regardless of Account, Category or Payee, would be set to ALL for each of those parameters in the date range.

Or should I just accept that I'm never going to pass the qualifications test for joining the Quicken product-design team?

J_Mike

@RickO et. al.

Re Item 3) PAYEES

Another factor that comes into play here involves investment transactions.
Security names appear to be in a separate database field - separate from Payees.
Thus, selecting All Payees excludes transactions involving securities.

Example; Dividend income from securities will be excluded if the user selects All Payees. It is included when the user selects None.

Bob@63

Oy, vey. I'm beginning to get a glimmer of understanding of how massively complex a challenge Quicken faces in creating a robust product experience for its customers -- each of whom seems to want something different. Meanwhile, your efforts are tremendously helpful in deepening my understanding of the product.

It's very much appreciated.

John Burgess

@bob - I agree that doing the tax recording on the non-qual account is a hack, and that financial institutions ( I have Ally and Fidelity) do it correctly, in the IRA. Maybe quicken will fix it someday. [ is anybody listening? ]

@bruceG - thanks for pointing out that there are two _different_ TXF exports. I’ll have to remember that!!