Categorized Transfers in Q Mac

Quicken Community

Allow an expenditure category to be set for transfers. It's possible to enter data this way, but the transfer function overrides the category. This is important for budgeting. My use case is an IRA contribution. That is both a transfer (checking to brokerage) and a budget category (IRA Contribution), since it's going from liquid to illiquid. Also important for tracking physical assets, e.g., transferring X dollars from checking into the asset value of a car on purchase, but also tracking the payment (and loss of liquid cash) in the budget.

Chris_QPW

Categorizing transfers is not needed (or correct, it will lead to double count in various places like reports), what is needed is the ability to budget transfers, which at the moment Quicken Mac doesn't have but they say they are working on it and will be released in the future.

jacobs

Exactly as Chris says. It's just not consistent accounting-wise to allow transactions to be both transfer and categorized expenses. Earlier versions of Quicken Mac actually allowed this to some extent, but Quicken now limits it in most cases, and will eventually change old transactions set up that way. The Quicken Mac product manager said it was decided at the upper levels of the company to not allow transfers to have categories to prevent unintended accounting problems in other areas. 

So there needs to be a way to budget for transfers, selectively. If you've been using Quicken Mac for a while, you may be aware that a similar need existed with reports, and over the past year, they have added the ability to selectively include or exclude transfers from reports. The product manager indicated that was a necessary first step to allowing budgets to similarly include or exclude certain transfers. The developers understand that users want this functionality and why, and we've been told it's under development was they tackle a number of significant feature requests for the budget area of the program.

Unfortunately, we don't yet know when this functionality will appear, just that they are working on it.

(This is one of the longest-running, and most highly voted, feature requests. If you care to read it, the existing feature request is here; you can note that it is one of the rare Idea topics marked as "Planned" in the blue box under the initial post.)

Unknown

Thanks for the feedback and link. My 30 second KB search didn't turn up the existing request, but I figured I wasn't the first to ask.

UKR

In Quicken for Windows, there's a special feature regarding contributions to IRA / retirement accounts.

This allows you to correctly categorize contributions and withdrawals under the covers, even though the transaction is only recorded as a transfer to/from the IRA.
Tax - related reports will correctly show these transactions based on tax line items.

If you want to see these transactions in Budget views, you only have to add "Transfer to [IRA acct name]" and "Transfer from [IRA acct name]" to the selected budget categories.

I would hope that similar features exist in Q Mac, and, if you need help, that a Q Mac expert user will help explain how to do set this up in Q Mac.

J_Mike

UKR said:

I would hope that similar features exist in Q Mac, and, if you need help, that a Q Mac expert user will help explain how to do set this up in Q Mac.

FYI - in QMac, contributions/distributions to/from retirement accounts are recorded by assigning a category to the transfer. The categories carry the appropriate tax line assignments.

The QMac system has an advantage over the QWin system in that one can make both pre-tax and after-tax contributions via transfers to a given retirement account - just set the appropriate category for the transfer. 

Am curious as to what modifications they (Quicken) have in mind to handle these transactions as they move away from the ability to assign categories to transfers in QMac.

taswope

This may not be related, so please direct me as needed. I want to categorize a transfer from my savings account to my checking account and for it to show up as income in my budget, specifically my "non-taxable income" category. I don't know how to make that transfer on the Quicken books and make it show up in my monthly budget. Any help?

volvogirl

How is moving money from your savings account to checking be income?  The income was when you deposited it into the savings account in the first place.  Or wherever it came from.  What are you trying to track?

NotACPA

@taswope Moving money between you checking and savings accounts is, conceptually, no different than moving you wallet from one pocket to another.  At the end of the action, you're neither richer (Income) nor poorer (Expense), but rather in exactly the same Net Worth position

jacobs

@taswope  As others have noted, a transfer from one account to another is neither income nor expense. But the issue you have is wanting this to be in your budget -- and that's entirely understandable.  I have bad news and good news…

Bad news: you can't do it currently. In fact, being able to budget for certain transfers, like loan payments or savings, is one of the feature requests with the highest number of votes on this forum.

Good news: the product manager for Quicken Mac acknowledged the need a long time ago, and said they were committed to bringing this functionality to the program. They started work on this more than a year ago, but apparently had to do some deep re-writing of the code for the budget part of the program in order to make this possible.

We don't know when this functionality will be released. It's been a long time coming, so the hope is sooner rather than later, but we just don't know. There are some signs one could look at optimistically: earlier this year, they added the ability to selectively include/exclude transfer from reports, so it's likely that a similar mechanism will be used for budgets. More recently, they added the ability to select which accounts to use for budgets. This was a feature request unto itself, but it's also likely a building block that was needed in order to be able to select which transfers to include in a budget.

taswope

@jacobs Thanks for a great response. I'm looking forward to Quicken for Mac being mostly "fully" functional.

Billst10

Nothing has been written in 6 months regarding budgeting for transfers from my brokerage account. I can estimate the expected income to my brokerage account but I don't think I can currently track (budget) estimated vs actual income. Can anyone help?

jacobs

@Billst10 Actually, a lot was written about it, as this was a major feature in the version 5.18 release in November.

• NEW - We’ve added the ability to track transfers in budgets. This was one of our most requested features. Transfer categories are important for tracking deposits to savings and retirement accounts when preparing for retirement, or tracking withdrawals coming from retirement accounts once you’ve retired. You’ll find new Transfer In and Transfer Out sections in your categories.

You can now select Transfer In (From) and Transfer Out (To) on an account by account basis in your budget. Go to Edit Budget, click on Select Categories, and scroll down to "T" to find these Transfer pseudo-categories you can now include.

Socrate

Categorizing transfers would be useful to understand the entire money picture of a user, how truly money flows, and how balances change over time:

1/ Income (money in)

2/ Expenses (money out)

3/ Contributions/retrievals to/from savings & assets accounts (moving assets around), and

4/ payments of debt (using assets to reduce liabilities).

Fundamentally this suggestion is about moving from a P&L view of personal finance to a total view of personal finance.

The pure income & expense view is too simplistic, IMHO.

Today I personally achieve this total finance view with manual accounts, manual transactions and reports in Excel. But it's a pain. It shouldn't be.

Here is a design idea that would enable transfers to have categories without breaking reports. It requires a simple change in data structure and some code rewrite:

Instead of "transfer" to be a category, it should be an attribute of any transaction (UI-wise could be a checkbox). Most transactions will have this attribute "off" (or "not transfer"). Transfers would have this attribute "on" (or "transfer"). The category could be anything the user wants it to be ("Save money in savings account", "Retrieve money from savings account", "Pay off debt", "Pay credit card", "Contribute to HSA", etc.)

The transactions with the attribute transfer "on" (or "transfer") would be required to have a counter party in one of the other accounts, and a sender/receiver attribute to derive direction of the transfer.

The reports would simply exclude both legs, or include one leg, or include both legs, depending on the type of the report and its purpose.

For example:

1/ A "classic" P&L report would exclude them, as it happens today

2/ A "comprehensive" P&L report would include one leg, useful for showing contributions to 401(k), contributions to HSA accounts, to 529 accounts, to ESPP accounts, etc.

3/ A B/S report would include both legs, as each increases/decreases the balance of the accounts included (less cash:less liability on CC, or less cash:increased assets in 401(k)).

4/ We could also have B/S movements reports, think of Sankey charts depicting changes in balance sheet period-over-period.

5/ This would also enable balance sheet budgets (who budget just the P&L?). I am budgeting how my assets, liabilities and net worth will evolve, in a way that is consistent with the P&L budget (I do this in Excel today, sadly)

On the comment that this would only benefit budgets: categorizing transfers is useful not only for budgets. Budgets are just plans, anticipated transactions in future periods of time, but transactions nonetheless just like the actuals.

Hope this helps, and that at some point I could have categorized transactions for a total financial view.

jacobs

Quicken management has said they are not going to allow categorized transfers because they violate the fundamental rules of accounting. I understand that people want other tools in their personal finance software, but I think the ability to show transfers in reports and budgets is likely as far as they're going to bend the rules.

(This accomplishes your #2 item, doesn't it? As for #3, a balance sheet -- the net worth report -- is a snapshot in time, so I'm not sure I understand the role of transfers in such a report.)