What's the best way to enter withholding taxes?

wayner9wayner9 Member
edited December 2018 in Investing (Windows)
I am in Canada and use Quicken only to manage my investments.  I have some stocks and ETFs on US exchanges and when I get a dividend (or other distribution) there is a 15% withholding tax.  What is the best way to enter these withholding taxes in Quicken?  I don't think I have to worry too much about tracking the amounts as these come on tax documents that I get from my broker that includes a box for tax paid to foreign jurisdictions that is then deductible from my Canadian tax.

Here is an example from my broker's online service:
14 Dec 2017 14 Dec 2017 MICROSOFT CORP DIV    750 $315.00
14 Dec 2017 14 Dec 2017 MICROSOFT CORP WHTX02 750 -$47.25

Comments

  • q_lurkerq_lurker SuperUser ✭✭✭✭✭
    edited May 2018
    From the US side, I record these as MiscExp transactions with a category of Taxes:Foreign.  That category is associated with an applicable IRS tax form/line.
  • wayner9wayner9 Member
    edited December 2018
    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?
  • Arctic Hare (H&B 2019 Canadian)Arctic Hare (H&B 2019 Canadian) SuperUser ✭✭✭
    edited December 2018

    @wayner9: I record withholding taxes simply as "income tax" because, as you noted, it is really just a prepayment against your total Federal Tax assessment. If you record it as income tax and then, for example, you got a refund on your tax return, then you can assign the "income tax" category to the refund and the net will be correct for the single category. If you use a different category for withholding tax than the rest of your income tax, then you may find that you paid "withholding tax" and got "income tax" refunded. I'm not certain my/this approach is the best approach, but it does facilitate matching of the inflow/outflow for income tax.

    Alternatively, you can create a tax-tracked category for withholding tax on foreign investments. Such a category might already exist in quicken. I'll try to remember to have a look for such when I get home this evenings.

    I don't know why, but I've had to make many manual tweaks to the tax-relevant categories in Quicken. The defaults, at least on my installation, don't line up well with the tax return... but the Quicken categories can be tweaked to line up with the tax return.

  • q_lurkerq_lurker SuperUser ✭✭✭✭✭
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    Yes, for the MiscExp transaction I do also fill in the applicable security, mostly for completeness.  For example, I I were to ask for some performance data on that security, the MiscExp transaction might show up as an applicable transaction. 

    That then becomes a two-edged sward, in that the tax withheld might reduce the performance values for that foreign security, but a similar US-based security without withheld taxes would report better, non-tax-withheld.  The performance is not an apples-to-apples comparison. 

    Coming around to the tax data reported to me, having the security identified makes it easier to cross check information.  

    All in all, more info tends to be better, IMO.

    Correct Category?  For US, it is also not definitive.  I chose the Schedule A, Other taxes field even though that is not where the data flows in the real return.  It is someplace I can collect and manage it.    
  • Bylo SelhiBylo Selhi Member
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

     I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?
    @wayner9, I don't think it matters. Ultimately you'll receive a T5 slip from your broker (I'm guessing TDDI) that shows the amount of the dividend (box 15) as well as the amount withheld (box 16.) 

    You can apply the amount withheld against foreign tax owing to the extent allowed by CRA.

    Also note that amounts are in US$. Make sure to convert these to CA$ when completing your tax return.
  • wayner9wayner9 Member
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    Thanks Bylo - you are correct in that it is TDDI.  By the way is there any way to automate getting these into Quicken.  I just went through the pain of entering a dozen or so year end Divx and related Withholding tax entries.  Painful as it doesn't appear that you can get any data out of TDDI other than CSV files.  I tried a semi-automated process in Excel but that doesn't work now that I have just transferred my investments to a new account and I have set it up to not use an associated cash account.
  • Bylo SelhiBylo Selhi Member
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    There's no way to import TDDI transactions into Quicken (that I know of.) It's been that way with TD (Waterhouse, Greenline, etc.) forever. I only have a few such transactions to do every year so it's not a big deal to do them manually. Besides this also offers the opportunity to record the correct exchange rate, although in practice you could use the Bank of Canada's average annual FX rate on all transactions.
  • wayner9wayner9 Member
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    Thanks - I don't know why they can't support this.  TD supports downloading of info to Quicken for bank accounts and credit cards, so why not for brokerage accounts?  I copy the data from the Activity page, or download it.  Then I copy it into a spreadsheet template that I have which creates a QIF file.  Then I switch to Quicken and import the QIF file.  But it never works that well since the Security name may get changed or they may use MICROSOFT CORPORATION instead of MICROSOFT CORP.    And cash transactions, like Withholding tax, rather than investment transactions cause me grief in this process.

    You can find something called XL2QIF but it didn't seem to work for me for the types of investments that I do.

    Arrggh!
  • wayner9wayner9 Member
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    For the Canadians that have responded on this thread - can you see if you are able to import USD exchange rates?  This feature fails for me.  I had an online chat with Quicken support and they were clueless.
  • Arctic Hare (H&B 2019 Canadian)Arctic Hare (H&B 2019 Canadian) SuperUser ✭✭✭
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    @wayner9: I can try such an import one evening this week, but, in the meantime, I am wondering why you need to import the F/X rates. Mine download daily using OSU. No upload required. Does OSU not work for you?

    What version and release of Q are you using?

    More broadly... it sounds like my investment portfolio is relatively similar to yours (in composition). For example, I also hold USD traded/denominated ETFs. I don't have any of the issues with using Q that you seem to have. It is not entirely clear to me what we are doing differently. F/X handling seems to work seamlessly for me.

  • wayner9wayner9 Member
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    I am now on Quicken 2018 - until a week ago I was on Quicken 2015 for Canada. My system only contains a limited number of USD exchange rates.  It may be downloading for current dates but it isn't getting data for past dates, even recent past dates.  It must not have been downloading the rates in 2015.  I manually put in rates for 12/29/2017 (last bus day of 2017) and 12/31/2017 to ensure that I have year-end rates.  I am concerned that not having past USD data will cause problems when calculating capital gains when I sell USD denomintated assets.

    Yes, our portfolios are similar.  I have Canadian and US taxable accounts plus Self-Directed RSP, TFSA, RESP and RDSP accounts (D for Disability - for my daughter).  I hold primarily ETFs but also a handful of stocks in both Canada and the US.  The bulk of my assets are in the taxable accounts, which is a good and a bad thing!
  • smayer97smayer97 SuperUser ✭✭✭✭✭
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    A complete aside...who do you have your RDSP set up with (that caught my eye)? I am looking to set one up for my son...looking for an FI with good flexibility, i.e. access to many investment instruments...so far TD stands out...

    We can start a separate thread about this....

    (don't mean to hi-jack but there is no private PM facility in this forum) :-\

    If you find this reply helpful, please be sure to click "Like", so others will know, thanks.

    (Canadian  user since '92, STILL using QM2007)

    Have Questions? Check out these FAQs:
  • wayner9wayner9 Member
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    I use TD Direct Investing for all of my investment portfolios.  The RDSP is invested in a few different ETFs - I manage it similar to my RESPs, etc.
  • smayer97smayer97 SuperUser ✭✭✭✭✭
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    Sounds good. Have you been happy with TD and the selection provided? How long ago did you set up the RDSP? How long did it take to set up? Any issues to be aware of?

    If you find this reply helpful, please be sure to click "Like", so others will know, thanks.

    (Canadian  user since '92, STILL using QM2007)

    Have Questions? Check out these FAQs:
  • wayner9wayner9 Member
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    I am not sure what you mean by the selection provided by TD as since the RDSP is just a type of brokerage account I can buy any stock, ETF or other type of investment that I want.  My main unhappiness with them relates to interfacing with something like Quicken - you cannot download transactions from TD Direct Investing into Quicken.  Can you do that with other Canadian discount brokers?  If so I would consider switching my assets.  

    Currently the only way to download transactions is in a CSV file but that isn't easy to import into quicken.
  • Arctic Hare (H&B 2019 Canadian)Arctic Hare (H&B 2019 Canadian) SuperUser ✭✭✭
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    To the best of my knowledge, there is no Canadian brokerage for which transaction download into Q is supported. I use RBC Direct Investing and transaction download to Q is certainly is not supported by RBC DI.

    FWIW, I am happy with RBC Direct Investing, except for the inability to download transaction data. I have to manually maintain my investment records in Q.

    You get premium customer service from RBC DI if you satisfy the criteria to be a Royal Circle client, e.g. there is dedicated call in number for Royal Circle and there is little to no wait on that number.

  • wayner9wayner9 Member
    edited April 2018
    So why doesn't anyone support downloading of transaction data?  This isn't rocket science - the QIF and QFX standards have been around for over 15 years?  And don't they all support downloading of bank account and credit card transactions?  I would seriously think about moving if someone provided this.  
  • Arctic Hare (H&B 2019 Canadian)Arctic Hare (H&B 2019 Canadian) SuperUser ✭✭✭
    edited December 2018

    Good question @wayner9. However, the question is really... why doesn't any Canadian brokerage support downloading of investment transaction data. Lot's of US brokers do support such.

    On a related topic, I have been advised by a few sources that the reason we don't have Direct Connect functionality in the Canadian flavour of Q is because it is not permitted by the regulatory environment in Canada. I've requested the details/specifics of the regulatory issue and none have been forthcoming. Thus, I don't know if there actually is a regulatory issue or whether there is some other undisclosed reason we don't have Direct Connect in Canada. It is a bit of a mystery... and a frustrating mystery at that.

    Maybe, whatever is the real reason we don't have Direct Connect in Canada, that same reason applies to the downloading of transaction data from Canadian brokers?

    Yes, you would think, if one of the discount brokers could/would offer transaction download, that might provide a meaningful competitive advantage... I'd also consider switching for that functionality.

    TD is an interesting case because it is a Canadian bank that has a US subsidiary and the US subsidiary offers Direct Connect, which is not supported by the parent Canadian Company. Riddle me that, Batman.


  • Quicken HaroldQuicken Harold Moderator ✭✭✭✭
    edited January 2018
    wayner9 said:

    So why doesn't anyone support downloading of transaction data?  This isn't rocket science - the QIF and QFX standards have been around for over 15 years?  And don't they all support downloading of bank account and credit card transactions?  I would seriously think about moving if someone provided this.  

    Splitting from original non-topic discussion.


    Please reference the new conversation here: Downloading Transaction Data
    Quicken Harold
    Community Moderator
  • Quicken HaroldQuicken Harold Moderator ✭✭✭✭
    edited March 2018

    Good question @wayner9. However, the question is really... why doesn't any Canadian brokerage support downloading of investment transaction data. Lot's of US brokers do support such.

    On a related topic, I have been advised by a few sources that the reason we don't have Direct Connect functionality in the Canadian flavour of Q is because it is not permitted by the regulatory environment in Canada. I've requested the details/specifics of the regulatory issue and none have been forthcoming. Thus, I don't know if there actually is a regulatory issue or whether there is some other undisclosed reason we don't have Direct Connect in Canada. It is a bit of a mystery... and a frustrating mystery at that.

    Maybe, whatever is the real reason we don't have Direct Connect in Canada, that same reason applies to the downloading of transaction data from Canadian brokers?

    Yes, you would think, if one of the discount brokers could/would offer transaction download, that might provide a meaningful competitive advantage... I'd also consider switching for that functionality.

    TD is an interesting case because it is a Canadian bank that has a US subsidiary and the US subsidiary offers Direct Connect, which is not supported by the parent Canadian Company. Riddle me that, Batman.


    D/L Data is different than Withholding


    Please reference the new conversation here: Downloading Transaction Data
    Quicken Harold
    Community Moderator
  • Quicken HaroldQuicken Harold Moderator ✭✭✭✭
    edited March 2018

    Good question @wayner9. However, the question is really... why doesn't any Canadian brokerage support downloading of investment transaction data. Lot's of US brokers do support such.

    On a related topic, I have been advised by a few sources that the reason we don't have Direct Connect functionality in the Canadian flavour of Q is because it is not permitted by the regulatory environment in Canada. I've requested the details/specifics of the regulatory issue and none have been forthcoming. Thus, I don't know if there actually is a regulatory issue or whether there is some other undisclosed reason we don't have Direct Connect in Canada. It is a bit of a mystery... and a frustrating mystery at that.

    Maybe, whatever is the real reason we don't have Direct Connect in Canada, that same reason applies to the downloading of transaction data from Canadian brokers?

    Yes, you would think, if one of the discount brokers could/would offer transaction download, that might provide a meaningful competitive advantage... I'd also consider switching for that functionality.

    TD is an interesting case because it is a Canadian bank that has a US subsidiary and the US subsidiary offers Direct Connect, which is not supported by the parent Canadian Company. Riddle me that, Batman.


    D/L Data is different than Withholding


    Please reference the new conversation here: Downloading Transaction Data
    Quicken Harold
    Community Moderator
  • Quicken HaroldQuicken Harold Moderator ✭✭✭✭
    edited March 2018

    Good question @wayner9. However, the question is really... why doesn't any Canadian brokerage support downloading of investment transaction data. Lot's of US brokers do support such.

    On a related topic, I have been advised by a few sources that the reason we don't have Direct Connect functionality in the Canadian flavour of Q is because it is not permitted by the regulatory environment in Canada. I've requested the details/specifics of the regulatory issue and none have been forthcoming. Thus, I don't know if there actually is a regulatory issue or whether there is some other undisclosed reason we don't have Direct Connect in Canada. It is a bit of a mystery... and a frustrating mystery at that.

    Maybe, whatever is the real reason we don't have Direct Connect in Canada, that same reason applies to the downloading of transaction data from Canadian brokers?

    Yes, you would think, if one of the discount brokers could/would offer transaction download, that might provide a meaningful competitive advantage... I'd also consider switching for that functionality.

    TD is an interesting case because it is a Canadian bank that has a US subsidiary and the US subsidiary offers Direct Connect, which is not supported by the parent Canadian Company. Riddle me that, Batman.


    D/L Data is different than Withholding


    Please reference the new conversation here: Downloading Transaction Data
    Quicken Harold
    Community Moderator
  • Quicken HaroldQuicken Harold Moderator ✭✭✭✭
    edited January 2018
    wayner9 said:

    So why doesn't anyone support downloading of transaction data?  This isn't rocket science - the QIF and QFX standards have been around for over 15 years?  And don't they all support downloading of bank account and credit card transactions?  I would seriously think about moving if someone provided this.  

    Splitting from non-topic


    Please reference the new conversation here: Transactions 1
    Quicken Harold
    Community Moderator
  • wayner9wayner9 Member
    edited January 2018
    wayner9 said:

    Thanks - I have been entering them as MiscExp as well but I don't know that I have them linked to the correct category.  Do you enter any info regarding the relevant security that the tax was for?

    Getting back to the original topic is it possible to treat the withholding taxes as a fee (almost like you enter a commission on a trade) and enter the div and tax as one transaction?  That would make the record keeping a bit easier but I don't know if you can enter a fee when entering a dividend.
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