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Tax Planner does not include Taxable Retirement Distributions & Withholding

JMSOUNDER

IRA and 401 distributions must be handled by transfers between the retirement account and a taxable receiving account. There is a known bug in the planner that does not allow these transactions to be included in the tax planner even when you have assigned tax line items to the appropriate categories.
This is my approach: sell appropriate shares of holding in the pension account with a resulting cash balance. Transfer cash to a taxable MM account and use a split transaction to record the the gross distribution, the withholding and the cash remainder; all with the appropriate categories and corresponding tax line items assigned and using the transfer in/out assignments for the Pension account. I can run a tax schedule report and all the data is properly defined. However, the data does not flow into the tax planner!
So, Has anyone worked out a method to include the pension withdrawals in the tax planner?

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Rocket J Squirrel

JMSOUNDER said:

IRA and 401 distributions must be handled by transfers between the retirement account and a taxable receiving account. There is a known bug in the planner that does not allow these transactions to be included in the tax planner even when you have assigned tax line items to the appropriate categories.

There is? My IRA distributions appear properly in the Tax Planner.

Sorry for the redacted amounts but trust me, there are numbers there. Differences include (a) I don't have a pension and (b) I don't have taxes withheld from my distributions, choosing to pay quarterly estimated taxes instead.

Ps56k2

same here - all good for teacher retirement pension deposit flow.....
from splits on deposit for - Fed, State, Soc, Medicare, etc

Ps56k2

JMSOUNDER said:

IRA and 401 distributions must be handled by transfers between the retirement account and a taxable receiving account.

Here are some notes on IRA transfers from various postings on the forum...

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Quicken IRA and RMD transaction

Summarizing -
you want QWin to record a transfer of the gross distribution from the IRA to the MM Acct (a taxable brokerage acct)
and record the fed & state withholding.
And you want QWin to track/report the taxable income and the taxes withheld in the tax reports.

Set the tax attribute "Transfers Out:" for the IRA account to "1099-R:Total IRA taxable distrib."
Go to the destination account - the MM Acct.
Enter a Deposit transaction - scroll down to the Cash Transactions at the end of the transaction list to find Deposit.
Select Split in the transaction window and record 3 split entries;
The first split is the gross distribution with the category indicating a transfer from the IRA Acct.
The second and third entries are the fed & state withholdings - with appropriate categories.
The net of this transaction is the net deposit to the MM Acct.
Schedule this transaction for your monthly distributions.

You will want to enter these transactions into the register prior to downloading from your FI.

The downloaded transactions from your FI may or may not match the register entries -
try to manually match if auto match fails. [Matching in investment accounts seems a bit strange at times].
If you can not get a match, I would delete the downloaded transactions.

Couple of important points:

1) The withholdings must be recorded in a taxable account in order for QWin to pick them up in the tax reports -
they must be outside the 'tax-deferred' shield of the IRA.
2) You can create categories for the fed & state w/h - use the corresponding 1099-R tax line assignments for these
3) It is important to use the Deposit transaction when transferring to a taxable brokerage acct.
QWin does not pick up the taxable event [the distribution] if one uses a 'Cash transferred out' transaction for some reason [bug?].
4) If the destination account is a cash account (checking or savings) -
just open a regular split transaction (in the destination acct)
and record the transfer from the IRA and the withholdings.
5) Check for proper tax reporting by running QWins Tax Schedule Report -
look for the 1099-R sub-header.
6) The procedure is exactly the same for distributions from any tax-deferred retirement account (IRA, 401k, other).
The tax line assignments are the same - note they all refer to 'IRA' - but work the same for a 401k or other.