Two confusing categories...

I just noticed that I have two categories named "Dividend Income" -- one is inside the master category "Investments" and the other is inside the master category "Personal Income." See first screenshot. This is creating some confusion for my accountant.

I figured that, since all of my investments are in investment accounts, it made more sense to standardize all these transactions into Investments: Dividend Income. (Please let me know if I'm wrong on this.)

So I did a search for all my transactions that are tagged Personal Income: Dividend Income. I went into one, and tried to change its category to Investments: Dividend Income. But in that popup menu, I can't find Investments: Dividend Income! See second screenshot.

Why? And how to fix?
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Best Answers

  • jacobs
    jacobs SuperUser, Mac Beta Beta
    Accepted Answer
    Hmmm. As you can see in the Type field, it shows "Miscellaneous Income." That enables a Category field on the next-to-last line, where "Personal Income:Dividend Income" is selected.

    But read the text to the right: "Miscellaneous Income: Income related to a holding that is not a Dividend, Interest payment, or Capital Gain Distribution".

    So I believe this transaction, if it was downloaded from your brokerage, was coded improperly by the financial institution.

    Here's what a Dividend transaction should look like:



    I enter my transactions manually, so I don't have any transactions which use the Personal Income: Dividend Income category as you do. If you add both the Dividend Income amounts, do you get the correct total for your account(s)? If so, your accountant may just have to deal with the dividends being reported in two separate categories. 

    Or, depending how many dividend transactions you have in the year, you may want to go in and change them to Type-Dividend transactions in the same dollar amount. If you have a small number of transactions, this could be worth spending a little time on; if you have many dozes or hundreds of dividend transactions, it probably isn't.

    It might help if you shared the name of your brokerage here. I'd be curious to know if others get downloaded transactions in the same way you're getting them, which to me appears to be wrong. It may take pursuing this with the brokerage to get them to correct their encoding of dividend transactions.
    Quicken Mac Subscription • Quicken user since 1993
  • jacobs
    jacobs SuperUser, Mac Beta Beta
    Accepted Answer
    Glad to hear it's just one stray transaction. If you can't discern a difference between this transaction and others, I would just chalk it up to a quirk at Merrill on that day, edit or re-enter it, and move on.

    If you continue to notice this recurring in the future, you may need to contact Merrill about this. Otherwise, just fix it and move on. 
    Quicken Mac Subscription • Quicken user since 1993

Answers

  • jacobs
    jacobs SuperUser, Mac Beta Beta
    I can't see enough of the transaction in the second screenshot to be sure I understand what you're doing there. Dividends in investment accounts should be done with a transaction type of "Income (Div Int, Dist) > Dividend" or "Reinvest > Dividend". It looks to me that you have selected "Income (Div Int, Dist) > Miscellaneous" here, which lets you enter an Amount and a Category. That's wrong. When you select the Type=Dividend Income, you enter the amount in a field called Dividend, and there is no category to select. Quicken knows how to categorize dividends, and doesn't ask/allow you to select a category.

    If you categorize your dividend transactions correctly, you will never use the Personal Income:Dividend Income category. In my Quicken data file, this default category exists, but its status shows "Unused". 
    Quicken Mac Subscription • Quicken user since 1993
  • Thanks for the response. Here's the full screenshot, attached. I never knew about the column for Type; I just enabled it now before taking the screenshot.

    I don't fully understand what you're saying about the transaction type. All of my transactions were directly downloaded from the bank, not manually input, and I didn't assign any categories for Dividend Income. (I only assign categories for discretionary spending, and for manually-received income.)

    If you're right about setting the Type to Income>Dividend, I wonder why Quicken didn't do this by default, and do I now have to go back through and reassign many other transactions to it, both for past transactions and also for future ones?
  • jacobs
    jacobs SuperUser, Mac Beta Beta
    Accepted Answer
    Hmmm. As you can see in the Type field, it shows "Miscellaneous Income." That enables a Category field on the next-to-last line, where "Personal Income:Dividend Income" is selected.

    But read the text to the right: "Miscellaneous Income: Income related to a holding that is not a Dividend, Interest payment, or Capital Gain Distribution".

    So I believe this transaction, if it was downloaded from your brokerage, was coded improperly by the financial institution.

    Here's what a Dividend transaction should look like:



    I enter my transactions manually, so I don't have any transactions which use the Personal Income: Dividend Income category as you do. If you add both the Dividend Income amounts, do you get the correct total for your account(s)? If so, your accountant may just have to deal with the dividends being reported in two separate categories. 

    Or, depending how many dividend transactions you have in the year, you may want to go in and change them to Type-Dividend transactions in the same dollar amount. If you have a small number of transactions, this could be worth spending a little time on; if you have many dozes or hundreds of dividend transactions, it probably isn't.

    It might help if you shared the name of your brokerage here. I'd be curious to know if others get downloaded transactions in the same way you're getting them, which to me appears to be wrong. It may take pursuing this with the brokerage to get them to correct their encoding of dividend transactions.
    Quicken Mac Subscription • Quicken user since 1993
  • Thanks a lot for this. This is Merrill Edge, and I have hundreds of such transactions. I just examined them. Only one -- this one -- got put in the Personal Income>Dividend category. All others are, as you predicted, of Type = Income>Dividend.

    I guess I'll just manually overwrite it. I don't have any idea whether it's worth bothering Merrill for (will they ever fix it?). Or is there some reason this isn't already categorized this way...
  • jacobs
    jacobs SuperUser, Mac Beta Beta
    Accepted Answer
    Glad to hear it's just one stray transaction. If you can't discern a difference between this transaction and others, I would just chalk it up to a quirk at Merrill on that day, edit or re-enter it, and move on.

    If you continue to notice this recurring in the future, you may need to contact Merrill about this. Otherwise, just fix it and move on. 
    Quicken Mac Subscription • Quicken user since 1993
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