Pre-Tax Annuity Transactions

Vincent Thacker
Vincent Thacker Member ✭✭
edited January 2021 in Investing (Windows)
I have a pre-tax annuity as an asset in my investment accounts. This year I began withdrawing that money in monthly installments. I need 15% of the withdrawal to to to category Federal Taxes Expense, 6% to go to State Tax Expense and the remainder go to an Income category I set up. I can find no transaction types that can accomplish. It seems that the more that Annuity and IRA assets are becoming popular, there needs to be a transaction group that can accomplish this distribution within Quicken for tracking purposes.


  • NotACPA
    NotACPA SuperUser ✭✭✭✭✭
    What sort of account (taxable or not) is the annuity recorded in?  Because you can't, in Q, record tax transactions in a non-taxable account.
    And, regardless of the type of account, what action are you using, in Q, to remove the funds?  Also, for the account, what attribute do you have set for "Transfers Out"?
    What you're asking already exists ... but I need the above info to  tell you how to  do it.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • The account I am using is a taxable (qualified) account in investments. I was using an account transfer to move the funds to my checking account. However this does not allow me to record the funds going into my checking as taxable income in the category field. Let me know if you need any further information.
  • J_Mike
    J_Mike SuperUser ✭✭✭✭✭
    I have an annuity account and have been taking monthly distributions for a number of years.

    The annuity is set up as a tax deferred brokerage account. Funds are invested in the FI's institutional funds. Sells are entered each month to generate cash for the distributions. The Transfers Out attribute for this account is set to 1099-R:Total IRA taxable distrib.

    Distributions from the annuity are handled exactly the same as one handles distributions from a traditional IRA or 401k account. A split transaction is entered in checking. The first split is a transfer of the gross distribution amount from the annuity. Splits are added subtracting federal and state withholdings. Categories for the fed and state withholdings are assigned the corresponding 1099-R tax line assignments.

    Post back if you need additional details.

    QWin & QMac (Deluxe) Subscription
    Quicken user since 1991

  • I appreciate your suggestion of using splits. However, I would like to set up a "Bill and Income Reminder" that will complete the transactions needed.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    When setting up the Reminder, call it an Income reminder and select the receiving taxable account. That will let you set up the split with the appropriate categories. You should have a 3-way split:
    - The gross amount as a positive number with your income category
    -  The federal tax withheld as a negative amount
    - The state tax withheld, also as a negative amount

    This will correctly show the net amount deposited to yur taxableaccount.  
    QWin Premier subscription
  • I looked at setting up the Income Reminder. I can see the ways to split the proceeds. How do I transfer the money from my Annuity Account. I cannot use the split option in the transfer reminder.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    You don't do a transfer reminder.

    In the split for the gross amount in the Income reminder in the receiving account, you set the category to the name of the annuity account in [square brackets]. That records it as a transfer.
    QWin Premier subscription
  • I really appreciate your help. I cannot get it to work correctly. Do you have a screen shot of an example you can send me?
  • I finally figured out how to set up the transaction and get the correct amounts. There is one issue. The fed and state tax show up in the Budget as negative numbers and that does not seem right. Anyone have information on this? Thanks to all for your help.
  • I tested this transaction again and everything is going in correctly, including the fed and state tax. Budget numbers are correct. I made an error in the budgeting. Thanks to all who responded. This is resolved.
  • So I have come up with one more question. I have a category in my budget within Quicken to track taxable income from the annuity. Is there any way I can get this split transaction to record the income in the taxable category for reporting purposes?
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    If you have set this up as we described above, the distribution from the annuity will be in a split transaction in your checking account and the gross amount will be a transfer from the annuity account.

    In your budget, you should go to Manage Budget Categories and in the Transfers In section, the annuity account should be checked. The annuity income will show as a transfer and not in a separate category.

    Is this what you have done?

    If so, go to the annuity account, click the gear at the top right, and select Edit Account Details. Click the Tax Schedule button at the bottom and in the Transfers out section pick the appropriate tax line item, which I think should be 1099R: Total IRA taxable distrib.
    QWin Premier subscription
  • Following your instructions regarding the Manage Budge Categories fixed the problem. Now the correct amount is showing in the income budget. Thanks for you help on this.
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