How do I get Quicken to recognize Federal tax withholding in Fidelity RMD withdrwals?

C Brownmiller

:/ While Fidelity seems to send all the correct info to Quicken about the RMD transaction, Quicken seems to ignore the Federal tax withholding. Without this information the Quicken tax planner does not give me an accurate picture of my tax situation. :/

Boatnmaniac

Quicken does not work well with IRA distributions (not just with RMDs and not just with Fidelity) when it comes to capturing all of the tax data properly.  This is because Quicken does not treat any expenses in Retirement accounts as taxable events.  In order to capture them as taxable events the money needs to be transferred out of the Retirement account into a taxable account.  And it needs to capture the tax withheld not only as a tax expense but also as part of the pre-tax taxable distribution.

There are a couple of good workarounds that compensate pretty well for this issue.  Here is the method I used because I find it to be simple and easy to use.  It will also be captured most accurately in both the Tax Planner and the Tax Reports.:

1. Enter the distribution as a net deposit (after tax amount) transaction into the checking or savings account.
2. Split the category.  Line 1 of the split should be categorized as a transfer from the Retirement account for the gross amount (before tax) as a positive number.  Line 2 of the split should be categorized for the income tax withheld as a negative number.  The total of Lines 1 and 2 should equal the net deposit amount of the transaction.
3. When Fidelity downloads the net distribution and tax withheld transactions in your Retirement account, delete them.  Your Retirement account balances will still be accurate because of that deposit transaction and category splits of #1 and #2.