Update Tax Category Assignments

BlueBuckeyeBlueBuckeye Member ✭✭
It appears that the tax form line item assignments for Subcategories have not been updated for recent tax law/regulation updates. For example, Miscellaneous Deductions are no longer allowed on personal returns. Also, please show where to assign Qualified Charitable Donations from Traditional IRAs. This has become very popular now that Std Deduction has been raised to the point where many, many folks can no longer benefit from Itemizing Deductions at all.
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  • volvogirlvolvogirl SuperUser ✭✭✭✭
    You should still enter deductions as before, including misc. and job expenses.  Even if you can't Itemize them on federal you might be able to itemize them on the state return.  
  • BlueBuckeyeBlueBuckeye Member ✭✭
    That may be true, but still the explanation attached to that Tax Assignment should use your words, too. Right now it says, "Investment expenses are deductible as a miscellaneous deduction. These include investment fees, custodial fees, trust administration fees, and other expenses paid for managing investments that produce taxable income." That's inaccurate without clarifying that it doesn't apply to Federal Income Taxes (anymore). Same for several other Tax Form assignments that are out of date, and a couple that should be added. There were big changes last year. It's time for Quicken to catch up, lest it be nicknamed, NotSoQuicken.
  • BlueBuckeyeBlueBuckeye Member ✭✭
    FYI, I've discovered the workaround for QCD's is to create a separate Gift sub-category, but not enable it as Tax Related. They are not included anywhere on 1099-r's; ie, neither in Gross Distributions on 1099-R, nor in Taxable Distributions. It is merely footnoted in a Worksheet on Federal tax filing. That sub-category should be added to the default Quicken list, as many are switching from Schedule A donations to QCD's from IRAs.

    I still am looking for Tax Assignment language to be revised to clearly state: "Miscellaneous Deductions have been discontinued on Federal tax returns."
    Votes would be appreciated.
  • Frank PFrank P Member ✭✭
    edited October 16
    I am astounded that Quicken has not addressed Qualified Charitable Distributions, or QCD's as a common transaction, recognized the restricted method for completing the transaction, and provided for it as a transaction type for investment accounts. I have found a method that works for me and will share it here. It is a bit of a workaround, but works.

    Two of the topics I read here direct users to transfer Qualified Charitable Distribution, QCD, funds to a taxable account and distribute from there because Quicken can only track taxable events from taxable accounts. That is so wrong. QCD's must be distributed exclusively and directly from a qualified tax-sheltered conventional IRA, typically distributed by a trustee at the brokerage house. Transferring funds first to a taxable account will violate the IRS rules for making such Qualified Charitable Distributions, and as such the distributions will likely not be treated as intended for tax purposes. Please consult your tax professional for confirmation on this!

    I have just had five checks issued by my broker. All five are made out to the charities, as required. Three are being mailed directly to them. Two are being mailed to me for personal delivery.

    Some brokerages allow an account holder to write checks from a conventional IRA account. If so, if a check written as a QCDs must be written and possibly even clear the IRA account before the end of the year in order to qualify. Also, such checks would need to clear before the total of all conventional IRA withdrawals for the year from all IRA accounts reach or exceed the account holder's required Minimum Distribution, RMD, for the year. In other words, a QCD must come fully from within the RMD, and not even partially beyond it. Again, consult your tax professional.

    Here is what I did, and the transactions do appear on the standard Quicken report for “What Taxable Events Occurred” under Easy Answer Reports.

    First, I created a new Quicken Category, “Qualified Charitable Distributions”, as an expense. When creating the category I clicked on the new category Tax Reporting tab (this tab is also there later if you edit the category). There I checked the Tax Related Category box; selected the Standard Line Item list radio button; then in the Tax Line Item for This Category drop down, I selected “1099-R: Total IRA Gross Distribution”. That assigns so-categorized transactions to the 1099-R, where they are “reported” in the difference between the 1099-R’s Gross Distribution (Box 1), and Taxable Amount (Box 2).

    So as a simple example, if the taxpayer’s total RMD distributed for the year was say $15,000; and the total QCD’s were $4,000; $15,000 would be reported in 1099-R Box 1, and $11,000 reported in Box 2 (i.e. $15,000 - $4,000). The $4,000 itself is not directly reported.

    Quicken transactions? Go into the Quicken investment account for the IRA.
    Double click on the blank transaction at the bottom of the IRA account’s Quicken register. That will open a transaction box. In the “Enter Transaction” drop box, scroll the scroll bar to the bottom of that drop box. You should see a group of “Cash Transactions”. Select "Write Check". At that point the makeup of the transaction box will change. There in that transaction box the information can be easily entered, including the beneficiary name, date, category (which you have previously added), amount, memo, and even check number (optional) if that is appropriate.

    I am using this method and it appears to be working well.
  • C JC J Member ✭✭
    Excellent!

    I have a Retirement Income category under which I have:
    RMD withdrawal (no tax line, but now making it 1099R total ira gross dist.)
    RMD income - self (1099R total ira taxable tax line)
    RMD income - spouse (1099R ira taxable tax line)
    I use the first one for any RMD related withdrawal from any of our retirement accounts.
    I use the latter two for all deposits of RMD monies sent from the appropriate retirement account administrators.
    I run a report on those categories. If I have recorded all transactions correctly, the report will sum to zero. The sum of all the RMD income lines should be my taxable RMD

    Now I am now going to add an RMD charity to the category (1099R total ira gross dist.). I could continue just using 'withdrawal' but I want to clearly identify and separate QCD's
    A report of RMD withdrawal and RMD charity should total to our required distribution.
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