How to correct all the year's paychecks to show pretax deductions

I'm a long-time Quicken user who never used the "Paycheck reminder" because it wasn't there when I started, and I wasn't aware of its benefits (because I rarely see anything come out about new features, when I get a new version!).

Now, I'm trying to use the tax planner for the first time to estimate this year's taxes.  I have one year of paychecks with manually-categorized entries - and none of my pre-tax deductions are indicated as pre-tax, so they're showing as part of my wages.

What's the easiest way to update any pre-tax deductions so that it's not counted as wages?

Answers

  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    There's only one way.  Go back and EDIT each paycheck to reflect the pre-tax amounts, the deductions and the post-tax amounts.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • EmKay
    EmKay Member ✭✭✭
    @NotACPA - thanks, but how do I do that?  What indicates to the tax planner that some categories or transfers are pre-tax?
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    Q determines the taxability of any Category by the Tax-Line associated with it.
    Do your paychecks indicate the amounts received (Gross Pay, bonus, overtime, etc), any amounts deducted etc.
    Look at your paycheck and your most recent tax return to figure out what's what in your paycheck.
    Q's Paycheck Wizard can help you set up the paychecks (even retroactively) and then delete your "net salary only" paycheck.
    Obviously, take a back before your undertake this endeavor, and frequently WHILE changing all of the paycheck transactions.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • cyberphile
    cyberphile Member ✭✭✭
    I recommend using Quicken to make a copy of your current data file and then test your changes on the new copy.  If you make a mistake or it doesn't work as you want, you can delete the copy and start over or try something different.
  • EmKay
    EmKay Member ✭✭✭
    Perhaps I'm overcomplicating this, but here's what I don't understand: 

    For the sake of argument, let's say I have $1000 in gross pay, with $100 pre-tax deduction transferring to my 403(b), and $100 pre-tax deduction for health insurance, and $25 for Fica, $25 for Medicare, $25 for fed tax and $25 for state tax (yes, I know those numbers are unreasonable).  I also have $100 that gets auto-transferred to my Roth IRA as a courtesy of my employer who will split my net pay to multiple bank accounts. 

    How does Quicken know that my "W-2:Salary or Wages" is $800, and not the $600 that ends up in my checking account?  I don't want all deposits to my checking account to have a tax line item of "W-2:Salary or Wages," so how does that $600 get attached to that tax-related category?

    I tried to create a dummy paycheck reminder and entered it, but then you cannot see the categories and their associated tax categories by viewing splits - it just takes you back to the paycheck reminder when you view splits.
  • EmKay
    EmKay Member ✭✭✭
    This is showing as "answered," but it's not.  Please see my last comment - how do I replicate how Quicken would've entered my paycheck splits if I had know about using paycheck reminders?  I do not know how I would enter wages if wages are gross minus pre-tax, and NOT minus other deduction?
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    EmKay said:
    Perhaps I'm overcomplicating this, but here's what I don't understand: 

    For the sake of argument, let's say I have $1000 in gross pay, with $100 pre-tax deduction transferring to my 403(b), and $100 pre-tax deduction for health insurance, and $25 for Fica, $25 for Medicare, $25 for fed tax and $25 for state tax (yes, I know those numbers are unreasonable).  I also have $100 that gets auto-transferred to my Roth IRA as a courtesy of my employer who will split my net pay to multiple bank accounts. 

    How does Quicken know that my "W-2:Salary or Wages" is $800, and not the $600 that ends up in my checking account?  I don't want all deposits to my checking account to have a tax line item of "W-2:Salary or Wages," so how does that $600 get attached to that tax-related category?

    I tried to create a dummy paycheck reminder and entered it, but then you cannot see the categories and their associated tax categories by viewing splits - it just takes you back to the paycheck reminder when you view splits.
    To view a paycheck transaction as a split transaction: press Ctrl + Shift + S