Add Qualified Dividend As Option For Income (Div, Int, etc.) and Income Reinvested Transactions

f0445780
f0445780 Member
edited October 2023 in Investments
Since a large number of dividends these days are qualified dividends, it would be nice if qualified dividend was an option within the Income (Div, Int, etc.) and Income Reinvested under Enter Transactions. Currently to enter a dividend as qualified, I have to change the download from my broker from Dividend to Miscellaneous and to reinvest that qualified dividend, I have to create a new transaction to buy the shares. It would be nice if qualified dividend was an option, and I was able to select that as my default for downloaded transactions.
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Comments

  • markus1957
    markus1957 SuperUser, Windows Beta Beta
    I would suggest adding a QDI checkbox in Security Details like exists for "Tax free" and then handle the income generated appropriately in the Tax Planner QDI section.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    The pros and cons of a change like this were discussed at some length here
    https://community.quicken.com/discussion/7409871/qualified-dividends-entry

    One issue is that for many mutual funds you do not know until your 1099 is issued how much of the dividends will be qualified.

    For planning purposes, perhaps entering an estimate in the Tax Planner would be the best apporach. I think just like on the 1040, you enter your total dividends at the top and the Qualified dividends at the bottom in the Tax Planner. 
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  • ChicagoGuy
    ChicagoGuy Member ✭✭✭
    > @Jim_Harman said:
    > One issue is that for many mutual funds you do not know until your 1099 is issued how much of the dividends will be qualified.

    That varies by brokerage firm. My Charles Schwab Account already distinguishes the xaction internally as "Qual Div Reinvest" while Vanguard would only show a similar xaction as "Div Reinvest".

    So, some firms (at least Schwab) can already provide an indication for Qualified when the xaction is posted. Maybe Quicken can create a new transaction category. "If Quicken supports,maybe the brokerage firms will also come"
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    How does Quicken currently record Schwab's qualified dividends when they are downloaded?

    If a fund distributes a mixture of qualified and regular dividends, are they downloaded as separate transactions?
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  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    This is would still be a good enhancement, and would make the Tax Planner predictions more accurate.
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  • Tommy
    Tommy Member ✭✭✭
    This is would still be a good enhancement, and would make the Tax Planner predictions more accurate.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited September 2021
    I agree with @markus1957 that the best way to implement this would be via a checkbox in the Security Details.

    But if we were to get an entry line in the Income and Reinvest dialogs, it could replace the Mid-term Capital gain line, which has not been used since 1997.
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  • tstuma3
    tstuma3 Member
    Get the qualified dividend to work
  • Tweezer
    Tweezer Member
    edited January 2022
    [Removed - Disruptive/Profanity] but make it possible for qualified dividends to be recorded in the correct section of Sch B... as it is now, when I enter into the "MiscInc" as "_QualDivInc" it shows as Taxable Interest in the "Schedule B-Interest and Dividends" report...
  • Aurelius
    Aurelius Member ✭✭
    edited December 2022
    Many Quicken users would like to use Quicken to do tax planning, but the inability to separate ordinary dividends from qualified dividends makes this very difficult. I think there are several solutions (and probably more).

    I realize that dividends, qualified dividends, and section 199A dividends are not accurately reported until 1099s are issued, but having at least this level of granularity, given the disparate tax treatment of these two types of dividends, would be extremely helpful.

    1). Allow users to indicate that a security receives either ordinary or qualified dividends. Then when the users enters a dividend amount of the Div or Reinv dialogue box, enter the dividend as a _DivInc or _QualDivInc according to the setting under that security.

    2.) Another less automatic approach would to add a "Qualified Div:" entry box in the Div or Reinv dialogue box. This requires user to remember which securities receive qualified dividends and which receive ordinary dividends, which is not as convenient. (This is similar to the work-around suggested by another user where the miscellaneous category is used and assigned to _QualDivInc., but more straight-forward)

    3.) Add "Security" as a sort for Schedule B-Interest and Dividends report. Then the user can at least identify dividends by security and build a spreadsheet to sum ordinary dividends and qualified dividends.

    Many users would really appreciate a better way to track qualified dividends. Thank you for considering this.
  • Quicken Jasmine
    Quicken Jasmine Moderator mod
    edited December 2022

    Hello @Aurelius,

    Thank you for taking the time to reach out to the Community with your request.

    I went ahead and changed your post to an Idea so other users who have the same or a similar request can vote on your idea by clicking the up arrow (see below).


    Ideas are also reviewed by our Development and Product teams in order to improve Quicken and implement new features requested by customers.

    Please, be sure to add your own vote as well.

    Thanks!

    -Quicken Jasmine

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  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited December 2022
    There is a Qualified Dividend Category that you're free to use, if you wish.  Simply select the "Inc-Income(Div, Int, etc.) action, enter the divided in the Miscellaneous box, and enter _QualDivInc in the Category box.
  • Quicken Anja
    Quicken Anja Moderator mod

    Hello @Aurelius,

    Thank you for reaching out to the Community with your request.

    Your idea has been merged into this already active Idea thread regarding the same request.

    Thank you!

    -Quicken Anja
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  • RA_
    RA_ Member
    The idea above for the Misc option would be OK, but would need to be added as an option on the Reinvest-Dividend transaction as well. It does not currently exist there.
  • lhoulton
    lhoulton Member ✭✭

    If it was appropriate to allow catigorizing Inc - Income(Div, Int, etc), that it should be equalaby appropriate for Reinvest - Income Reinvested

  • ricke
    ricke Member ✭✭

    To account for qualified dividends at tax time, I am using the Misc. option of the Div Income dialog, and then use _QualDivInc as the category. My use of this work-around is to give me more accurate tax-reporting and tax-planning.

    1. When using this method as a work-around, does adding a transaction with the amount of qualified dividends reduce the amount of non-qualified dividends downloaded, or does it add additional dividends, thereby skewing dividend income by the amount added as qualified dividends?
    2. If adding the qualified dividend transaction adds to the total dividends downloaded, what is the best workaround to give a more accurate picture of non-qualified versus qualified dividends?
    3. Additionally, when making the qualified dividend transaction, can I make a single line-item entry that contains - all qualified dividends, across all accounts, and all dividend payors?

    Any advice?

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited April 2
    1. The Qualified dividend entry in Quicken is separate from the Total dividends. This is the same as the way as taxable dividends are reported of the 1099-DIV form. If you receive $100 of Qualified dividends a US stock, the 1099-DIV will have $100 in Total dividends (box 1a) and $100 in Qualified dividends (box 1b).
    2. What I do is I record all dividends as Dividends in Quicken, ignoring which are Qualified. This means that the Qualified dividends are not captured in the Tax reports. In the Tax Planner, I enter a manual figure on the Qualified Dividends line for my estimated Qualified dividends for the year.
    3. You can certainly enter a single annual transaction, or one for each account, to record the Qualified dividends. Because this entry is in addition to the dividends that are already recorded, you would have to adjust the cash balance to make the total amount zero. You could record this as a split Deposit that looks like this:

    Or, to be clearer in the Transaction List, you could record it as two separate transactions, a MiscInc with the _QualDivInc Category for the Qualified dividends and a Balance adjustment from the account's gear menu to restore the correct cash balance.

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  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited April 1

    Thinking further about this Idea, I think the best implementation would be for Quicken to add a setting for each security where the user can specify the percentage of the security's dividends that are Qualified. The default should be 0%, as it is today. This percentage does not generally change much over time.

    For a US stock, stock mutual fund, or ETF, the Qualified percentage would generally be 100%. For a taxable bond, bond fund, or bond ETF, this would be 0%. For a balanced fund that holds a combination of stocks and taxable bonds, it might be 40%.

    The user would continue to record the total dividend payments using the existing dialogs and Quicken would record the full amount as _DivInc and the Qualified portion as _QualDivInc. Only the _DivInc should add to the cash balance or to the cost of reinvestments. The _DivInc and _QualDivInc amounts would flow to the Tax Planner and Tax reports. Dividends in Reminders would also get an allocation to _QualDivInc in the Tax Planner.

    Because _DivInc includes the _QualDivInc amount (as it does today), _QualDivInc should not be included by default in the Investing or Spending reports, to avoid double counting. Note that this would be a change to the Investing Income report

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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭

    @Jim_Harman Thanks for those clarifications. I had not realized that was the way the _QualDivInc category was being applied. I had expected total Dividend Income to be _DivInc + _QualDivInc. That is NOT the case.

    And while _QualDivInc as a category is associated to Tax Line Schedule B:Qualified Dividend, the only place that appears to follow is for the Tax Planning tool. The category does not show up on the Schedule B tax report. It will show up separately on various reports grouped or subtotaled by Category.

    Back to the original idea, the OP wrote:

    Currently to enter a dividend as qualified, I have to change the download from my broker from Dividend to Miscellaneous …

    That would (currently) appear to be inaccurate as I understand it. Changing the transaction to MiscInc with category = _QualDivInc is going to lose that transaction as a Dividend Income component. The amount would not show on a Schedule B report (though it does appear in a Tax Schedule Report) or as dividend income for the tax planner. Am I missing something or did something change along the way?

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited April 1

    @q_lurker

    You are correct.

    It is somewhat confusing, but as currently (and I think correctly) implemented, _DivInc should include Qualified dividends. Amounts assigned to _QualDivInc correctly flow to the Qualified Dividends lines in the Tax Planner and the Tax Schedule report. Amounts entered on the Qualified Dividends line correctly reduce the total tax due computed by the Tax Planner because that portion of the total dividends is taxed at a lower rate.

    What I am seeing in the Schedule B report is that the amount I record as _QualDivInc is incorrectly shown as Taxable Interest.

    Also the Tax Summary report incorrectly adds the _DivInc and _QualDivInc amounts.

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  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    edited April 1

    … as currently (and I think correctly) implemented, _DivInc should include Qualified dividends.


    I don’t see that as the current implementation. What I find incorrect about the current implementation is that you have to enter the qualified dividend twice - once as _DivInc and a second as _QualDivInc with then the cash correction you cited. IMO, the qualified component would have been better as a subcategory - _DivInc:Qual.

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭

    I suppose the "correct" implementation depends on what real life data you are trying to match. The Tax Planner is apparently mapping to the way dividends are reported on the 1099 forms - Total dividends in box 1a and Qualified (a portion of the total) in 1b. Also all the brokerages I have dealt with download Total dividends throughout the year and only provide the breakdown that shows the Qualified portion in the 1099's at the end of the year. That would also be consistent with the security level "% Qualified" setting I proposed above.

    On the other hand, I can't think of any other situations where a downloaded or entered amount is supposed to be recorded twice. The closest is Tax free income, where the dividends are entered using the Dividend entry but converted behind the scenes to _DivIncTaxFree, based on the security level Tax Exempt setting, and that Category is not included on the Tax reports.

    What I am proposing is that you enter dividends from securities that produce Qualified dividends using the Dividend entry and they flow directly to _DivInc. Behind the scenes Quicken would compute the amount to add to _QualDivInc and use that in the Tax Planner. _QualDivInc would be reported in the Tax reports but not added to _DivInc.

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  • ricke
    ricke Member ✭✭

    https://community.quicken.com/profile/Jim_Harman I like your idea regarding the ability to specify the percentage of the Ordinary Dividend to allocate as being a Qualified Dividend, and to have the proper amounts roll to the Tax Planner as well as the appropriate reports. This sounds like an easy fix.

    Is this a recommendation that has been made, and if not, can we do so?

    Additionally, I spoke with the tech people at Morgan Stanley this morning and inquired of them as to whether the category for Qualified Dividends are appropriately listed when the dividends are actually paid, and then downloaded through Quicken throughout the year. I was informed that is the case. When the dividends are paid, they are appropriately allocated in the Morgan Stanley system. It sounds to me like Quicken is not recognizing the Qualified Dividend categorization as it's being sent from Morgan Stanley. If this is indeed the case, Quicken should recognize the brokerage house categorization at download, and appropriately use it on the back end … problem solved.

    Rick

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭

    @ricke Ideas like this are the only mechanism we have to propose improvements to Quicken.

    If you like an Idea, go to the first post in the thread and cast your vote for it by clicking on the little up arrow below the vote count. Generally Ideas must receive around 50 votes in order to be proposed to Development for implementation.

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  • ricke
    ricke Member ✭✭
    edited April 1

    Done! Thank you Jim_Harman

    As a side note, this would only be helpful for anyone who has a brokerage account and also pays federal taxes. If you feel like that may apply to you, please click the up-vote arrow at the top of this thread.

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    edited April 2

    One further thought on a workaround - not a desirable or permanent fix - to capture Qualified dividends in the Tax Planner using the current Quicken:

    I mentioned above that you can enter them using the normal entry for Dividends and then add an adjustment on the Qualified Dividends line in the Tax Planner.

    But if you know the dividends are Qualified when you receive them, you could record them as Miscellaneous Income using the _QualDivInc Category and add the adjustment on the Dividends line.

    In the second case the Tax reports will show the Qualified dividends correctly but you would have to add the Dividends and Qualified Dividends to get the correct total.

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