How do you include reinvested taxable capital gains and dividends in the Lifetime Planner

chitownhockey

Well, I'm at the point in my life where I really need to rely on the Lifetime Planner in Quicken.

Things are set up EXCEPT I don't know how to account for the annual taxable REINVESTED capital gains and dividends in my non-retirement accounts.  

I'm still paying taxes on this amount each year...and it counts towards my modified adjustable gross income (MAGI).  But I don't see a place where I can enter an estimated or real number for that "income" amount in the Lifetime Planner, even though it's reinvested and I don't see any real cash.  

What happens then is that its not included as income and its ultimately not included in the estimated tax amount due for each year.  

Should I just list this as "Other Income" in the planner?

I'm attempting to stay below a certain MAGI threshold so as not to pay an extra amount for my Medicare.  Estimating what other withdrawals from my retirement accounts will be partially based on that taxable capital gains and dividends amount.  

Note:  This IS for the Lifetime Planner...and NOT the Tax Planner...I'm talking about.  

Sherlock

I wouldn't rely too heavily on the Lifetime Planner but, if you understand its limitations, I think it's a good indicator.

The tools expects us to set a fixed rate of return on our investment accounts.  We're able to group the account's rate of returns as taxable, self tax-deferred, and spouse's tax-deferred and before and after retirement.  To account for the taxes, we're able set a percentage of the return that is taxable each year.  Remember, the planner will be using the effective tax rate you've provided.



If you haven't already, you may want to review the built-in documentation by clicking on the in the Quicken Planner: Savings and Investments window.

If you have a good understanding of how the planner works, you may certainly use Other Income for finer granularity but rates of return including reinvested capital gains and their tax implications do vary over time.

Scooterlam

I've been using Quicken's Tax Planner feature the last 3-4 years to dial-in my EoY AGI. Tax Planner is a much more tactical tool for working up EoY tax scenarios et. al..  It gives you a "projected" and 3 additional scenarios to use and modify.   Lots of features. Have a look, it might be the tool you need.  

In Quicken's help, search for "Using Tax Planner".

chitownhockey

That would be great, but I'm still using Quicken 2017...so the Tax Planner is useless to me for now until I upgrade to the subscription in April 2020. 

Sherlock

chitownhockey said:

That would be great, but I'm still using Quicken 2017...so the Tax Planner is useless to me for now until I upgrade to the subscription in April 2020. 

I've been successfully using a spreadsheet for many years to project our estimate income taxes using data exported from the Tax Summary report.   It's customized for our situation and it requires annual resetting of the tax rate table and tweaking any rule changes but it has done a better job than Tax Planner or the prior year's TurboTax.

mshiggins

@Sherlock do you estimate your state taxes as well as your federal taxes?

Sherlock

mshiggins said:

@Sherlock do you estimate your state taxes as well as your federal taxes?

Yes.  I do.  

chitownhockey

Actually, I'm not interested in my tax burden.

I just set up a spreadsheet instead to calculate my monthly taxable retirement account withdrawals to coordinate with my fixed social security and pension amounts.

I can work backwards from the total $174,000 amount...and then hold off on my December withdrawal until AFTER the dividends and capital gains are distributed mid-ish December.  This should work for me.

Thanks all for the suggestions though.