I receive a monthly Annuity, how do I enter it for taxes?

Stephen R

I receive a recurring monthly Annuity check and I hope for many, many more years. How do I set it up to record properly for taxes? I have it setup as a split deposit. But it does not seem to record property.
It is for a total of $218. $112 is taxable and $106 is non-taxable.
I have the category list setup as:
Annuity Account [JC Annuity] (source) to Checking Account [Checking] (destination account)
Category - Annuity linked to 1099-R:Total pension gross distrib. (with two subcategories)
Subcategory - Annuity:Non-Tax (no IRS form assigned)
Subcategory - Annuity:Tax-Income with 1099-R:Total pension taxable distrib.

How do I setup the transfer the $218 from the from the [JC Annuity] account to my checking account so it records property for taxes?

Thanks, Steve

Chris_QPW

I have a feeling the problem resides with the split transaction.
You need to basically record both the transfer and categorize that income.  This is one of the few times I think that categorizing a transfer is a valid.

A standard split like this assumes that the split lines are going to reduce the amounts.

But that isn't what you need.
The trick to get what you need is a to use [Checking], which is to say a transaction that adds/removes an amount from the register without affecting another category or account.

Sherlock

There are a few ways to handle this type of split distribution:

If all you really need is 1099-R:Total pension taxable distrib., the annuity account could be set with no tax schedule assigned to transfers and the distribution deposit could be a split transaction with two transfer entries from annuity account: one entry for the taxable portion and one entry for the non-taxable portion.  The taxable portion entry should be associated with an appropriate tax-line item.  

For example:

[JC Annuity]  $112 with 1099-R:Total pension taxable distrib.
[JC Annuity]  $106 

If you also want to track the gross distribution with 1099-R:Total pension gross distrib., the out bound transfers could be set for the annuity account and the distribution deposit split could use a transfer entry for the gross distribution and an offsetting transfer for the taxable portion.

For example:

[JC Annuity]                 $218   (1099-R:Total pension gross distrib.)
Annuity:Tax-Income   $112    (1099-R:Total pension taxable distrib.)
[Checking]                  -$112

UKR

Do you really need to track that [JC Annuity] account and its disappearing balance?
Personally, I would treat the deposit to the [Checking] account as if it was similar to a paycheck, money coming in from the outside, with Splits for taxable and non-taxable portions only. That would be easy to do with a Scheduled Reminder which you enter into the register a day or two before Due Date. And if you know how many payments you're going to get, you can set an End Date or End after [xx] deposits on the reminder.

Chris_QPW

I have a feeling the problem resides with the split transaction.
You need to basically record both the transfer and categorize that income.  This is one of the few times I think that categorizing a transfer is a valid.

A standard split like this assumes that the split lines are going to reduce the amounts.

But that isn't what you need.
The trick to get what you need is a to use [Checking], which is to say a transaction that adds/removes an amount from the register without affecting another category or account.

Sherlock

There are a few ways to handle this type of split distribution:

If all you really need is 1099-R:Total pension taxable distrib., the annuity account could be set with no tax schedule assigned to transfers and the distribution deposit could be a split transaction with two transfer entries from annuity account: one entry for the taxable portion and one entry for the non-taxable portion.  The taxable portion entry should be associated with an appropriate tax-line item.  

For example:

[JC Annuity]  $112 with 1099-R:Total pension taxable distrib.
[JC Annuity]  $106 

If you also want to track the gross distribution with 1099-R:Total pension gross distrib., the out bound transfers could be set for the annuity account and the distribution deposit split could use a transfer entry for the gross distribution and an offsetting transfer for the taxable portion.

For example:

[JC Annuity]                 $218   (1099-R:Total pension gross distrib.)
Annuity:Tax-Income   $112    (1099-R:Total pension taxable distrib.)
[Checking]                  -$112

UKR

Do you really need to track that [JC Annuity] account and its disappearing balance?
Personally, I would treat the deposit to the [Checking] account as if it was similar to a paycheck, money coming in from the outside, with Splits for taxable and non-taxable portions only. That would be easy to do with a Scheduled Reminder which you enter into the register a day or two before Due Date. And if you know how many payments you're going to get, you can set an End Date or End after [xx] deposits on the reminder.

Stephen R

Many thanks to you all... I could not get my head around the negative entry. Add $218, then subtract $218. Its so simple when you see it written.
Steve