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How to show 401(k) transfers to checking as "Income" in budgeting

Steve Walter
Steve Walter Member ✭✭
I'm retired and part of my income derives from a monthly 401(k) distribution which I track as a transfer out of my 401(k) account into my checking account. The problem is that it shows as a "transfer", which it is, but not as "income", which it also is. This doesn't allow me to me to produce a end of year report that shows all income and expenses as it doesn't see these transfers as income. What am I missing?
How can I track the fluctuations in my 401(k) and at the same time see the distributions it produces as "income" in my reports?


  • jobworker
    jobworker Mac Beta Beta
    I am in the same position and what I did was to setup a recurring transaction in my checking account (to which the money is transferred ) I also setup a recurring transaction in my Schwab account.  I have an RMD which is the same amount every month.
    When Schwab transfers the amount to me it 'matches' my recurring transaction and is not setup with any category.  It usually takes 3 days later for the transaction (transfer) to reach my bank.  There, the recurring transactions is setup with the category of Personal Income/Taxable IRA Withdrawal and is an item that shows up in my Tax Schedule.  See screen shot
  • jobworker
    jobworker Mac Beta Beta
    I meant to add the image of the Schwab transaction which you will note under the heading Description/Category is listed as "Transfer to Bank".  That is a Description, not a Category classification, so transfer does not come into the equation.
  • Steve Walter
    Steve Walter Member ✭✭
    Thanks for your response Jobworker -
    It sounds from your explanation like you automatically download your transactions so what works for you might not work for me as I enter them manually. There is only one transaction for me - a transfer from my 401(k) to my checking account.
    In your case I'm confused where your transfer from Schwab actually goes when it transfers, or does the transfer actually initiate the transaction of moving it into your checking account as income?
  • jobworker
    jobworker Mac Beta Beta
    @Steve Walter.
    Granted there are slight differences between our processes.  Schwab has instructions to transfer directly into my checking account on a monthly basis.
    First I get a transaction in my investment (IRA) account downloaded from Schwab that it has deducted my RMD.  In your case I presume that is the transaction that you enter manually into your Investment transaction (IRA) account when you receive the money in your bank account.
    Then three days later Wells Fargo downloads a transaction that I receive as a ACTION/"DirectDep" which I have setup as a recurring transaction with the Category "Taxable IRA Withdrawal".  See screen shot.


    There is a way for you to accomplish everything at one time.  
    1. Setup a non Tax Category which is a dummy category.  I have one for certain instances where I have to balance a split transaction.  
    2. Create your bank recurring deposit with the the "Taxable IRA Withdrawal" category.
    3. Now Edit the recurring transaction for all transactions and add two more Splits, one to show the debit to your IRA account and another split to balance the amounts so that your original deposit is not doubled. That would be the dummy category in 1. above.
    See screen shots below. 1. Recurring trans, 2. Trans Detail, 3. Example Splits




    I hope this helps and makes sense to you.
  • jacobs
    jacobs SuperUser, Mac Beta Beta
    I have a a similar approach which avoids the need for any dummy categories -- because Quicken actually has one built in which is perfect for this purpose!

    See my post here with screenshots. This technique applies for IRA RMDs or 401k withdrawals, moving money and creating taxable income.
    Quicken Mac Subscription • Quicken user since 1993
  • jobworker
    jobworker Mac Beta Beta
    @ Jacobs .  For all the time I have been using Quicken, I was blind to the Category Adjustment.  I guess I did not see the wood for the trees.  Wow! Can't believe it.  Thanks.
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