Quicken Mac needs a feature for IRA RMD withdrawals

jacobs

Many Quicken users are past the age where they need to take withdrawals from their IRA accounts annually, but Quicken Mac lacks any facility for doing such a withdrawal and having it show up in the Tax Schedule report. It needs one!

See below for more details. Vote below for this feature to be added to Quicken Mac.

jacobs

Currently, a user needs to do some contorted gymnastics to post a sale in their IRA account, transfer the funds to a non-IRA account, and show that amount as taxable income from a retirement account:

(a) In the IRA account, create a transaction to record the Sale of the security, creating a cash balance in the account.

(b) In a checking, savings or non-retirement investment account, create a transaction to Transfer the cash out of the IRA account into the receiving account. If federal and/or state taxes were withheld at the time of the sale, the transaction is a split, with one (or more) lines for the taxes withheld and one for the gross amount of the IRA sale.

These two steps get both accounts to have the correct dollar amounts: the IRA account is back to a zero cash balance, and the receiving account has the correct cash received. But because Quicken Mac does not include IRA account transactions in the Tax Schedule report, the amount of the RMD -- which is taxable income -- does not show up on the Tax Schedule report. So the user needs to know or figure out some work-around tricks:

(c) In the same transaction in the receiving account which does the transfer, add two more split lines: (1) Use Category "Personal Income:Taxable IRA Withdrawal", which is assigned to the proper 1099-R tax line for the Tax Schedule report, with the amount of the total RMD withdrawal. (2) Use category "Adjustment" or "Transfer" for the negative of the same amount, because those categories are not included in any report.

(d) The transfer transaction with the splits must originate in the checking or receiving account, not the IRA account; if the split to record the income is in the IRA account, it won't show up in the Tax Schedule report because the Tax Schedule report bypasses IRA accounts. 

It should be apparent that step (c) is not intuitive and is clearly a hack to make things work. And step (d) is not intuitive to users accustomed to linked transfers being able to be entered in either of the accounts involved.

Note: there is currently another work-around for (c): make the transfer split also have a category of "Personal Income:Taxable IRA Withdrawal". We've been told Quicken management is going to remove the ability to have transfers (cash flow transactions) which also have categories (income/expense transactions) because it violates the rules of accounting -- but this loophole currently still remains in Quicken. Since we've been told this loophole will be removed, this can't be the recommended procedure for Quicken Mac users to use. 

jeff.hecht

When I asked for information on minimum required distribution specifically for the Mac edition, I am referred to answers for the Windows edition. Until I found this discussion, I was not aware that the Mac edition did not provide a straightforward way to cope with what can be a rather complex tax issue, especially for those of us who have recently started receiving IRA payments.

garysmith87

jeff.hecht said:

When I asked for information on minimum required distribution specifically for the Mac edition, I am referred to answers for the Windows edition. Until I found this discussion, I was not aware that the Mac edition did not provide a straightforward way to cope with what can be a rather complex tax issue, especially for those of us who have recently started receiving IRA payments.

You can also find this discussion, which has "real life" screenshots to help.

https://community.quicken.com/discussion/7902160/help-with-rmd-adjustment


\

Marc

Thanks for the input. I do hope quicken fix this oversight. Now that I went though and made new transaction and deleted the old ones, how do I change the cleared status to a green check mark? In the past I thought you could just click on the status and it would rotate through the options, so the next time I reconcile the bank account they don't show up as unreconciled.

jacobs

@Marc One click on the empty Clr box creates a blue check mark; then Option-click to turn it to a green check mark.

Marc

Option Click. Ahh. thank you

jacobs

Adding another use case here: a user who transfers some money from a traditional IRA (or 401k) account to a Roth IRA account. Roth conversions are taxable income, even though the transfer of funds is between two retirement accounts. So just like the example above, a user currently has to create a "trick" transaction to create taxable income in the Quicken tax report:

In a checking account (or any non-retirement account), create a transaction with an Amount of zero. In the splits tab and add two split lines: (1) Use category "Personal Income:Taxable IRA Withdrawal", enter the amount of the Roth conversion as a positive number; and (2) Use category "Adjustment" with the same amount as a negative number.

What's needed for Roth conversions to work without hacks like this is for Quicken to continue to ignore investment income in retirement accounts but create an exception for the category "Personal Income:Taxable IRA Withdrawal"; any use of that category should show up in the Tax Schedule report. 

PrettyQuickSmitty

register one more vote for an easy way of registering RMD from IRA accounts as taxable income...

Brad Kuhn

I finally got around to fixing the IRA Distribution (RMD). Since Quicken for Mac doesn't recognize withdrawals from an IRA for the tax report, QCDs from an IRA don't show up in the tax report.

bobc3

Please offer a non-kludge way of doing this

jacobs

Adding to my original post and request for RMDs, as Brad wrote above, there's another use case which users have pointed out: Qualified Charitable Distributions (QCD). With a QCD, an individual is making a withdrawal from from a retirement account to a charitable organization which counts as a charitable deduction is not taxable as income like regular RMDs. Quicken Mac ignores retirement accounts for the Tax Schedule and Schedule A reports, because most activities like dividends and capital gains in a retirement account are correct to ignore because they are not taxable events. As detailed above, it's possible to get a retirement distribution show up on the tax reports, but it requires a hack of an entry. QCDs add another wrinkle, because the tax report should be able to show the amount of retirement income which is taxable (regular distribution) and non-taxable (QCD). 

Quicken Mac needs a way to enter a Qualified Charitable Distribution withdrawal in a retirement account which shows up on the 1040 tax report as a QCD, just as there needs to be a way to enter RMD withdrawal from retirement accounts which show up on tax reports.

Sharon kazel

I agree, this feature needs to be added.

MontanaKarl

jacobs said:

 With a QCD, an individual is making a withdrawal from from a retirement account to a charitable organization which counts as a charitable deduction.

There is another recent topic in which I clarify QCDs.  What @jacobs is saying above is incorrect.  A QCD from an IRA as part of an RMD is not, repeat, not a charitable deduction!  The tax benefit is in fact better than a deduction in that a QCD does not count as ordinary income in your 1099-R for your RMD.  You can NOT get a deduction as well as an exemption from income tax on the QCD portion of an RMD.

You may have no benefit itemizing deductions over the larger senior standard deduction... but whether standard or itemized, the QCD distribution is non-taxable...whereas any other portion of your RMD is ... hence the topic of this thread.

jacobs

Thanks @MontanaKarl. I corrected my post in that other thread and forgot to update this one; I've updated it now. You are correct that a QCD is not a charitable deduction.

But there still needs to be a way to track it in Quicken such that it can be reported on your taxes as a non-taxable RMD. Users can partly do this on their own by creating a category for non-taxable RMDs, but I don't believe there's a tax line to assign such a category to because there is no line for QCDs on a Form 1040. (You must report your full IRA distribution on line 4a, and then report the full amount minus QCDs on line 4b.

So, as this thread details, there needs to be a way in Quicken to enter RMDs, and then as this issue adds, Quicken needs to provide a way to distinguish regular (taxable) from  QCD (non-taxable) distributions, and have them appear properly on tax and income reports.  

Catherine

> @jeff.hecht said:
> When I asked for information on minimum required distribution specifically for the Mac edition, I am referred to answers for the Windows edition. Until I found this discussion, I was not aware that the Mac edition did not provide a straightforward way to cope with what can be a rather complex tax issue, especially for those of us who have recently started receiving IRA payments"
I fell into the same trap - got some answers related to setting a tax schedule to an Account. That dropdown does not exist in Quicken for Mac. Fundamental difference - wouldn't have wasted my time if we could filter for version (Mac or Windows) on the Support Page.

Charles P

I have a similar problem with Windows Premier. Under Shares Sold (with Federal Tax withheld), I enter Proceeds to and select my bank. The next option shows a possible entry for "Commission" only, with no option for Federal Tax withheld. I am hoping the Mac work-around here helps. A Quicken fix is in order!

Charles

MontanaKarl

https://community.quicken.com/discussion/comment/20347079#Comment_20347079

Charles, please post any issues with QWin in one of the many QWin forums / threads. Almost nothing works the same in QMac as QWin, so bringing up WIndows issues here will only confuse some readers…and will also not reach your target audience (Windows users).