Categorizing Transactions Properly

Question

How should I categorize Transfers to avoid them showing up as Income?

I just installed recently and allowed Quicken to download transactions from several banks to get me started.  I have a few transfers from one institution to another and since Quicken downloaded farther back from one institution than the other, they are showing as Uncategorized Income.

If I reclassify them as Transfers they will change the balance on the incoming account.

What is the best way to handle these 3 or 4 transactions?

Thanks

David Christopher · Accepted Answer

Transfers between Accounts will show up as an expense in the donating account and income in the receiving account on the budget and reports, but they do not show as income for taxing purposes. They show up in Budget screen if you select From and To, and they show on reports if you select select "show All" on the Advanced Tab of the report Customize screen.  On reports if you select "Exclude All" on the Customize Advanced tab they will not show on report at all.

In your case, let's just forget the 'Institutions' because in Quicken you may have several accounts (checking, Savings, investments) from several institutions but in Quicken they are just accounts and you are transferring from one account to another.

In the account that has 'Uncategorized Income' as the category, the category should be [Contributing account Name] but if you put that in as the category of the receiving account it will throw off the Balance in the contributing account by that much. You will have to adjust the contributing account Beginning Balance by that much. (increase the contributing account beginning balance)

Since you are just starting, I would leave things as they are now. But if you want perfection here, do as the above paragraph says. I would make a backup of current file just in case you get confused and make a mistake. If you want your original file back later, locate it where you stored it and click on the .QDF file name and it will open.