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Fed and State taxes paid from IRA brokerage account do not show up on Tax Summery.

Taxes paid on my behalf by my IRA brokerage account with my RMD do not show up in the Tax summary report or the Tax center. I use the same categories as I do when my Qtrly taxes are paid from my bank and they do show up. What could be wrong?

Comments

  • volvogirl
    volvogirl SuperUser ✭✭✭✭
  • Richard Frey
    Richard Frey Member ✭✭
    edited January 2020
    Thank you for responding so quickly. I tried to adapt the answer you referred me to, but it did not seem to fit my facts as quicken did not respond in they way he said it would.

    Vanguard is my Brokerage. They make me have a separate taxable Brokerage account and an IRA Brokerage account. Quicken does not let me do the "Deposit" transfer from the IRA account to the taxable account. If I generate my own "Deposit" entry in the taxable account, it does not function the same way a split entry works in say a savings or checking account. It does not subtract the Fed tax and State tax entries from the gross IRA distribution to arrive at the net deposit to the general cash account and it does not pick up and display the tax line items either.
    Has anyone dealt with Vanguard in the posting of their RMD distributions?
  • Bob_L
    Bob_L SuperUser ✭✭✭✭✭
    edited January 2020
    Yes.  I have the deposit set up in a non tax deferred account as a split to handle the taxes.  I auto enter it each month as an income reminder.  Then when the Vanguard download comes down it  includes a sell transaction within the IRA that creates a cash balance for the gross amount which is cleared out by the transfer to the deposit account.  Vanguard also downloads a cash transaction in the amount of the federal taxes that I delete.
    Quicken Premier Subscription, Windows 10 Home
  • Richard Frey
    Richard Frey Member ✭✭
    edited January 2020
    I did not completely understand the explanation that Volvogirl referred me to. Bob's answer did not fully explain what I needed to do. Between the two of them I pieced together something that seems to be working. I take only one RMD a year. At my chosen date, (Entry # 1)Vanguard sells shares from my IRA MM account. That generates the cash I need to pay my Federal and State taxes due. Vanguard creates an entry that shows they paid the (Entry # 2) FED and (Entry # 3) State my taxes due on the RMD. The final entry that (Entry # 4) Vanguard makes is to transfer the balance of the cash generated by entry # 1 to my Vanguard Taxable account. It is an entry that uses "cash transferred out of the account" with the transfer account shown as my taxable Vanguard Brokerage account. This shows up, in the taxable account, as a "Xin". I changed this to "Deposit" and now I have a split window. I set the first Line as 1099 R (gross taxable distribution of an IRA). The second line is the Fed taxes paid and is shown as a subtraction (a negative number) The third line is State taxes and is also shown as a subtraction. The result is the net amount that Vanguard transferred from my IRA Brokerage account to my Taxable Brokerage account. These entries show up in the "Tax center" and the "Tax Summary Report".

    I deleted no entries in my IRA Brokerage account. All four Vanguard entries are necessary to make the cash account balance. No entries were deleted in my Taxable account, but, the one entry that Vanguard made had to be changed from "Xin" to "Deposit" in order to get Quicken to record the Gross taxable income and to record the taxes paid to the Fed and State.

    How do I split the "Did this answer your Question?" between VolvoGirl and Bob?
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    The customary method is:1o:
    1) Set the tax attribute for the IRA account so that all transfers out are reported on an IRS 1099
    2) Sell securities in the non-taxable account, If you can do so at the same time, transfer the ENTIRE amount to the taxable account.  Because of Step 1, this will be a taxable W/D.  If you can't do the transfer in the same step, use the WITHDRAW transaction
    3) In the Taxable account, EDIT split the deposit (from step 2) to show only the amount actually received.  In the split, show the ENTIRE amount as the transfer from the IRA and then show the taxes withheld as a NEGATIVE amount in the split.  The 2 figures, added together, will equal the amount of the deposit.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Bob_L
    Bob_L SuperUser ✭✭✭✭✭
    @richard Frey    Maybe I read it wrong, but it sounds to me like you don’t have the correct gross tax distribution?  That is entry 4 is not the taxable amount, is it?

    The deposit transaction should have it’s first line as the gross distribution as a transfer in from theIRA.  The next two lines should have the two tax withholdings as expenses netting out to the net deposit.  You create this split transaction in the receiving account.  The when the download from vanguard arrives the sell transaction will create the dollar amount of cash needed to offset the transfer out to the receiving account.  The two tax withdrawals in the IRA are deleted (or never accepted).

    Quicken Premier Subscription, Windows 10 Home
  • Richard Frey
    Richard Frey Member ✭✭
    edited January 2020
    Hi Bob and NotACPA,
    Bob, Line 4 is not the taxable amount. Line 1 is the taxable amount ( it is the Gross distribution of the sale of shares in my IRA account). Line 4 is the net amount after Fed and State tax payments. Everything reflects correctly in Tax Center and Tax Summary report. All cash balances are correct

    NotACPA, You say that I need to set "Set the tax attribute for the IRA account so that all transfers out are reported on an IRS 1099". My IRA Account is set that way and I have set "1099 R" as Tax Line item "1099-R: Total IRA gross distribution." Let me see if I understand what you want me to do. Lets set some numbers up. 100 is the gross distribution caused by Vanguard selling my shares. 35 is the Fed tax. 8 is the State tax . 57 is the net amount transferred to my taxable account. In order that the transferred out amount be the amount reported to the IRS, I should change that 57 dollars Vanguard entry to 100 dollars. This makes it necessary that I delete the 35 and 8 dollar entries in the IRA account to make the cash balance zero out. Then in the taxable account, I change the "XIN" posting, caused by the IRA's Transfer out entry of 100 dollars, to Deposit and do a split entry:
    100
    -35
    -8
    Net 57.
    This will satisfy the requirement that all transfers out are the amounts reported to the IRS on the 1099.
    Quicken does not generate any reports to the IRS so this is moot. My way is a work around. Your way has some good points as well. They both show that Quicken has ignored this defect in the way it handles taxable transactions in Non Taxable accounts.
  • Bob_L
    Bob_L SuperUser ✭✭✭✭✭
    edited January 2020
    I see that now re. your Line 4.  

    If you did not delete the downloaded tax transactions from Vanguard, they will be a drag on your performance measures for the IRA.  That is, if you run an investing, investment performance report you will see what I mean, i.e. those expenses have been double counted, once in the IRA and again in the deposit account.
    Quicken Premier Subscription, Windows 10 Home
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    There should NOT be a line 4 in your split deposit to the taxable account.  Rather, That Net $57 should be the amount of the deposit into the banking account.
    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Richard Frey
    Richard Frey Member ✭✭
    NotACPA, you are right. I called it line 4, but meant it to be the bottom line or total line and represents the net amount the IRA account transferred to the Taxable account.

    Bob, You are correct the taxes show up twice in "Investing/ Investing Transactions (not Performance). That could sway me to delete the 2 tax (Fed and State) entries, but it confuses me at the same time. If I delete the entries for $35 and $8 and change the transfer out entry to read $100. What does the deposit split entry look like in the Taxable account. The Taxable account has only received $57, but I am telling it that it has received $100. How does the cash balance out? It will be $43 over.
  • Bob_L
    Bob_L SuperUser ✭✭✭✭✭
    The split is in the deposit account and should show 100-35-8=57

    [IRA ACCOUNT]     100
    Fed Tax                    -35
    State Tax                  -8
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  • Rocket J Squirrel
    Rocket J Squirrel SuperUser, Windows Beta ✭✭✭✭✭
    I have set "1099 R" as Tax Line item "1099-R: Total IRA gross distribution."
    I believe you will find "1099-R:Total IRA taxable distrib." works better in reports and in the Tax Planner.
    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
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