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Problem with IRA realized gains/loss transactions showing up on the tax schedule report.

John44

I have a problem with my IRA RGL showing up on the tax schedule report. If I select the "all accounts" option they do not show, but neither does my Fed & State taxes. So in order to get the taxes I choose the "selected accounts" option and the selected categories option. I do not select the Investments category which should bypass RGL transactions. How can I get the taxes to show without having the realized gains/losses showing?
Thanks,
John
QMac Ver. 6.1.1
macOS 11.2.2

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jacobs

Hmmm... the strange part is your taxes not showing on the Tax Schedule with everything selected. I wonder if perhaps the categories you're using for federal and state taxes are ones you created yourself (or imported from a prior version of Quicken Mac 2007 or Quicken Windows). If not, everything below is probably off-track, but if so, read on…

Find one of your transactions with a tax category. If you don't have "long names" turned on for categories, go to Preferences > Register and select Display Long Names. Make note of the full category and sub-category used in your transaction.

Now go to Window > Categories, and find the category and subcategory you used. If it's one of Quicken's categories set up for tax reporting, it will have a green check-mark. Here's a visual of what I'm talking about:

Image: https://us.v-cdn.net/6031128/uploads/editor/66/y1kb4xv3s0j8.png

Note that under the category Taxes, I have a subcategory-category of "Federal" and another of "Federal Tax". The latter is Quicken's default, while the former is what came over from my old Quicken 2007. Note that it shows the "Federal Tax" line -- the one Quicken has configured to show up in the Tax Schedule, shows it is unused. All my transactions are using my old "Federal" sub-category.

There are a few possible solutions here. One is to configure the category you are using to show up on the Tax report. To do this, double click to edit the category, and check the box for "Tax Related".

Image: https://us.v-cdn.net/6031128/uploads/editor/k6/j7sb24j698aw.png

Once you click Tax-related, Quicken allows you to select what tax item this is. In this case, it's on the W-2 Tax form, and the line item is "Salary or wages, self":

Image: https://us.v-cdn.net/6031128/uploads/editor/3z/oumna9ckudmj.png

You'll have to do this for all the tax categories you use, such as Social Security and Medicare, state and local taxes. But before you do all of them, do just the one for federal withholding, save it, and run the Tax Schedule report. If your federal withholding is now showing up, you know you're on the right track, and you can continue to configure the other tax categories.

The other solution is to merge two categories into one. Select your category and Quicken's category, click Merge Categories, set the category to remain to be the "Federal Tax" one Quicken is set up to use, and click Merge:

Image: https://us.v-cdn.net/6031128/uploads/editor/zs/km8k6yjw3ytd.png

J_Mike

@John44

You are recording the tax withholdings in in the IRA, a tax deferred account. These tax related transactions need to be recorded in a taxable account - the destination account for the distribution.

To illustrate; assume you are taking a $1,000 gross IRA distribution with $150 fed withholding and $50 state withholding. The net, $800, is deposited to your checking account.

Go to the checking account and open a split transaction.
The 1st spit is a $!,000 transfer from the IRA account - the total gross distribution.
Tge 2nd and 3rd splits are the withholdings - subtracting from the gross.
The net of the split transaction is the $800 deposit to checking.

You will need to create categories for this transaction; e.g.,
IRA Distribution w/ tax line 1099-R:Total IRA taxable distrib.
IRA Fed W/H w/ tax line 1099-R:IRA fedederal tax withheld
IRA State W/H w/ tax line 1099-R:IRA state tax withheld

The gross distribution and the withholdings should now report under the Form 1099-R subheader in the tax report.

Note that you Do Not include the IRA account in the tax report.

Finally, if you download to your IRA, you typically get 3 transactions; the net and the 2 withholdings. Delete these 3 transations as they are replaced with the gross transfer transaction. Your cash should balance.

John44

Jacobs, thanks for your reply. I agree that the taxes should show on the tax schedule report when using the "all accounts/categories" option.
I don't know how to tell if a category is Quicken or user defined. I use theTax:Fed category for federal with holding. So I changed the category on the federal tax transaction in my IRA account from "Tax:Fed" to "Taxes:Federal Tax" to see if it made any difference. It still did not show on the report.
I don't know how to show you the category list. copy/paste doesn't work.
All of my other accounts (all non retirement accounts) show the "Fed:Tax" category on the Tax Schedule report ok. My IRA account transactions are updated from Fidelity during the one step update.

John44

@J_Mike
Thanks for your reply. Yes I agree that your suggestion should work for RMD withdrawals. However how would I handle a Roth conversion? In this case the distribution goes into another retirement account. Life would be a lot easier if Quicken would allow these tax categories in an IRA retirement account. The only reason the transactions are there is because they are valid transactions.
John44

jacobs

John44 said:

I don't know how to tell if a category is Quicken or user defined. I use theTax:Fed category for federal with holding. So I changed the category on the federal tax transaction in my IRA account from "Tax:Fed" to "Taxes:Federal Tax" to see if it made any difference. It still did not show on the report.

It doesn't really matter if you use the Quicken default category or your own, as long as you own is set up correctly for tax reporting. "Taxes:Federal Tax" is Quicken's default category, and in your Category list, you can see that it has the green check mark in the Tax column; if you open the Category to edit it, you can see the tax item it is assigned to. "Tax:Fed" is your own account (or one from a prior version of Quicken). As I described above you can either merge it into Taxes:Federal or set it up to be a W-2 > Salary or Wages tax item.

But in this case, you're describing a withdrawal from an IRA account. @J_Mike provided the key information for the categories you need and tax lines to associate them with. I'd note that Quicken does have a default category for the withdrawal from the IRA; it's called Personal Income:Taxable IRA Withdrawal, which is associated with 1099-R taxable distribution. But the trick is figuring out how to use this category, because Quicken Mac doesn't have a way to both transfer money and categorize it at the same time.

Here's the way I'm aware of for recording an IRA withdrawal so it will show up on a Tax Schedule report. Instead of transferring money out of the IRA account, create the transaction in the account that's receiving the money, such as checking or a regular investment account, which is what I show here. In the regular investment account, create a Payment/Deposit transaction to transfer money from the IRA account, but then add two split lines: one to recognize the income, and the other the "Adjustment", a category that doesn't appear in reports, to offset it:

Image: https://us.v-cdn.net/6031128/uploads/editor/vw/fvqdpc1hoifw.png

Again, the income and adjustment splits must appear in a taxable account; if you did this from the IRA account, the transfer would be fine, but the income wouldn't show up on the Tax report.

For a Roth conversion, there's one additional wrinkle. You are selling a security from a regular IRA account, then investing it in a Roth account, and this is a taxable event just like the one shown above. But in this case, both the regular IRA and Roth IRA accounts are excluded from the Tax Schedule report. The only way to get an item onto the Tax Schedule report is to do it in a taxable account. So you need another work-around. You could do this as if it went through your bank account: do the transaction above from your bank account, followed by a transfer from your bank account to the Roth IRA account. The two transactions in the bank account offset, but you've created the taxable income. Or you could do the transfer as it happened: between the regular and Roth IRA accounts, and then create a $0 transaction in your bank (or any non-retirement) account with the offsetting splits to Taxable IRA withdrawal and Adjustment. @J_Mike am I missing any easier way to do this?

J_Mike

jacobs said:

But in this case, you're describing a withdrawal from an IRA account. @J_Mike provided the key information for the categories you need and tax lines to associate them with. I'd note that Quicken does have a default category for the withdrawal from the IRA; it's called Personal Income:Taxable IRA Withdrawal, which is associated with 1099-R taxable distribution. But the trick is figuring out how to use this category, because Quicken Mac doesn't have a way to both transfer money and categorize it at the same time.
(emphasis added)

QMac does permit assigning a category to a transfer.

Reportedly, QMac is backing away from this feature. But for the present it still works and is very effective in handling contributions and distributions involving retirement accounts. Am very curious to see what they will offer in place of categorized transfers.

jacobs

J_Mike said:
QMac does permit assigning a category to a transfer. Reportedly, QMac is backing away from this feature. But for the present it still works and is very effective in handling contributions and distributions involving retirement accounts.

It can be tricky just creating such a transaction. If you enter the Transfer and then the Category, Quicken removes the Transfer and leaves the Category. But if you enter the Category first, then enter the Transfer, Quicken retains both.

I've been avoiding categorized transfer transactions because the product manager has said they'll be disallowed in the future, and I'm not sure what they will do with ones that exist in the database -- I don't want their changes in the future to potentially mess up a work-around I've used in the past.

John44

OK, thanks for your time/effort. Wow, I managed to do the RMD manually like J_Mike suggested without using a transfer. It works but shows the taxes coming from my regular account not my IRA account.
I managed to do the Roth conversion also.
Seems like there should be an easier way.
Thanks for all of your help! Very much appreciated.
John44