Some tax reports are missing info

NotACPA

"why does Quicken's Tax Schedule report include transfers but the Schedule A report does not"

Because, from an accounting viewpoint, a Transfer isn't an Expense.  You're neither richer nor poorer after a transfer.

And Sched A only includes Expenses.

PAUser

@NotACPA This is frustrating. [removed - violation of community guidelines] Quicken allows one to set up transfers into an account as a Schedule A expense. The Schedule A section of the Tax Schedule report includes such transfers, but the stand alone Schedule A report does not. Please explain that.

And a transfer is an expense if the transfer is from a cash account to a liability account. For example, if I transfer money from a checking account to a mortgage liability account, it's clearly an expense. This is a similar situation.

Bob_L

Mortgage payments are typically set  up as a split where the interest is an expense while the payment on principle  is a transfer that  reduces the liability.  It is not a tax expense

PAUser

@Bob_L Sure it is. The interest is clearly a tax expense.

Again, everyone keeps dancing around the question - why is data missing from the Sched A report that is included in the Tax Schedule report?

And a transfer is an expense. A transfer from a credit card account to a liability account is clearly a cash expense, particularly for a cash basis taxpayer.

On a different but similar thread, I believe that @volvogirl may have told another person to do this as two separate transactions - a cash payment from my credit card or checking account (no transfer), and then a separate transaction showing
a payment into my medical liability account (again, no transfer). It's the exact same thing but having to enter the data twice. Quicken will report that method accurately, I assume.

However, it should also report it accurately doing it as a transfer. It purports to do so and does so in one report, but not another. Why not both?

But this is frustrating me since no one has even begun to answer my initial and many-times-repeated question - why the difference in the reports. So, please, no [removed - violation of community guidelines] other[s] respond unless you can answer that specific question - why the differing data in the two reports?

NotACPA

"a transfer is an expense if the transfer is from a cash account to a liability account. "

[removed - violation of community guidelines]

That's a reduction of a liability ... not an Expense.  The expense was when you bought the property and took out the mortgage.

Or, perhaps you erroneously believe that you get to take that deduction twice.

PAUser

@NotACPA [removed - violation of community guidelines]

 Do you know the difference between a cash basis and accrual basis taxpayer? The expense is not when you take out the mortgage but when you make the payments. Neither you nor I can claim any mortgage deduction until we make actual payments on the mortgage and we're limited to the amount of our actual payments.

And, again, you're not asking my [removed] question. Why the difference in the two Quicken reports? Please don't respond unless you can answer that question.

NotACPA

No I'm not a CPA .I'm a retired "Certified Information Systems Auditor".   And the few people who have both a CPA and a CISA will tell you that the CISA is every bit as hard to achieve as a CPA.

The primary difference is that I don't need to know "timing and recognition of Income and Expense" and the CPA's don't need to know the computer ... and usually don't.

[And, a transfer is not an expense.]

Jim_Harman

I suppose the answer to your underlying issue is "Because that is the way the report is designed." I don't think many other users experience this issue, because deductable expenses are almost always recorded directly as payments and not as transfers.

The Schedule A, B, and D reports have other limitations as well - they only work for a limited number of years for example, and as documented here
https://community.quicken.com/discussion/7853844/fix-schedule-b-report-so-it-handles-split-transactions-that-include-dividends-correctly
the schedule B report has problems with split transactions.

If the Tax Schedule report includes the information you need, why not just use that report instead? Or you can use one of the other methods for recording your transactions that we have proposed.

Bob_L

I agree with Jim.  The Itemized deduction report is a "smarter" report than the others.  That is it is designed to feed into tax prep software and as such only accepts items directly categorized as such.  It also has an expectation as to how users will record transactions.

Not entirely clear why you do what you do, but I suggest that you categorize expenses in the UPMC liability account as medical expenses which will then show up properly on tax reports.  Then when you decide you are going to make a payment on your credit card, you would record that amount as a charge on the CC account categorized as a transfer to the UPMC account (You are at that point simply moving from one liability account to another liability account).  The CC liability of course gets reduced when you pay it off.

Similarly if you choose to send a check you would record it in the checking account categorized as a transfer to the UPMC account, which would  then reduce the  UPMC  liability.

PAUser

Thanks @Jim_Harman and @Bob_L . The problem with your suggestion, Bob, is that if I categorize the charges in the UPMC report as medical expenses, won't they be transferred to my tax software as such even though I may not yet have paid them? I was doing it the way I was because I didn't want that to happen. I didn't want a medical expense to appear as a Schedule A expense until actually paid.

And Jim, I will use the Tax Schedule report hereafter - if I remember (!). The problem is that there's no ready reminder that the Schedule A report is untrustworthy nor is there any way to "kill" it so that it cannot be used. I wonder why Quicken includes it if it is so inaccurate and untrustworthy?

Just so you know, the way I stumbled on this problem is that I wanted to know what my actual out-of-pocket medical expenses are so far this year. I didn't care about any other tax schedule items, so I pulled up a Schedule A report as apparently the most narrowly focused and on-point report. However, I knew immediately that the number it gave me was wrong so I then pulled up the Tax Schedule report which provided a number much closer to what I was expecting.

I'm always concerned when software gives the wrong answer - it makes me wonder whether I am doing something wrong or is the software untrustworthy? I think that I've discovered the answer to my problem here - it's the software and not me.

Quicken is acquiring a bunch of negative characteristics from my perspective, and this is one more. Unfortunately, there are no or not many viable alternatives out there that do all that Quicken purports to do.

Bob_L

From IRS pub 17:

If you use a credit card, include medical expenses you charge to your credit card in the year the charge is made, not when you actually pay the amount charged.

Also, your method, which I was trying to work with, is creating a lag because it is essentially an accrual approach.

PAUser

@Bob_L

If I understand your quote from the IRS pub 17 above correctly, that's exactly what I'm trying to do in Quicken, no?

And can you explain further why my approach is essentially an accrual approach? I don't understand your comment.

Bob_L

Seems to me that you are creating an Accounts Payable Account, as opposed to  a cash basis where you record the expense directly and pay it at the same time.

PAUser

Perhaps, but I am trying to make Quicken reflect what I actually do and my actual situation.

I carry, at times, a large balance on my account at UPMC (Univ. of Pittsburgh Medical Center). I make payments on that account from time to time and use a credit card to make those payments because of the 3% cashback feature on the card. I'd like Quicken to reflect that reality, i.e., that I do not pay medical bills as they accrue, but they are added to my account balance, and I make payments on that balance from time to time.

You may not care, but one reason I'm set up this way is that I use a Christian Sharing Ministry in lieu of insurance. I am reimbursed for my medical expenses several months after they accrue, and then I pay the expenses as I receive the reimbursements.

Secondly, getting detailed account information from UPMC is a royal pain-in-the-you-know-what. Rather than providing me with a monthly account statement showing new charges and payments, UPMC simply sends a one-line statement showing my current balance. I have to then call them and ask for itemized statements. Those itemized statements, though, are not a typical account statement, either. Rather, they include charges from numerous internal UPMC accounts (more than 6, as best I can tell) that I have to puzzle through and try to figure out if they're accurate and correct and if they actually total the same amount as in the monthly statement. What makes it even more complicated is that UPMC apportions my payments to each of its separate internal accounts on an apparently random basis. For example, if I send UPMC $100, it may apportion $5.13 to one internal account, $26.49 to another, etc.

I wasn't tracking my UPMC account in Quicken at all until recently when I decided to add it to Quicken to gain a more accurate picture of my true current financial situation. Leaving a $10,000 liability account out is a pretty significant distortion!

I'm recounting all of this because my situation with financial bills is significantly different than most. However, I thought that Quicken could handle it, and I set up Quicken to reflect my actual practices. And Quicken does handle it, except for the Schedule A report.

Jim_Harman

Here is another idea, consistent with the cash basis accounting in Quicken.

The payment date in whatever report you are using will be the transaction date. If you want a separate account with transactions for each doctor visit, you can record the date of the office visit in the Memo field, the payment date in the Date field, and give the appropriate medical Category to each transaction. Then there would be no need to categorize the transfer from your credit card.

Bob_L

I can see where you have a lot to keep track of and perhaps more than what you can easily do in Quicken.