I need help with handling distributions from my IRA

mannyg
mannyg Member ✭✭✭
I am running Quicken Deluxe MAC version 6.8.3 on an M1 MacBook Pro

Today I got my first monthly IRA withdrawal deposited to my non-IRA money market checking account.  My IRA account and checking account are at Fidelity.

When I downloaded the transactions from Fidelity, this is what showed up in the Quicken account registers:

* There is one deposit transaction in my checking account register showing it as a Payment/Deposit from the IRA account in the amount of the net deposit after taxes and is “uncategorized”

* There are three withdrawal transactions in my IRA transaction register:

* one Payment/Deposit uncategorized for the federal tax withholding amount
* one Payment/Deposit uncategorized for the state tax withholding amount
* one Payment/Deposit uncategorized for the net cash amount transferred to the checking account

I am confused and I don’t know what I need to do in the checking account register to record the two tax withholdings and not screw up the record keeping and reporting.  I read through other threads and tried to do this, but I can’t get it to work.  This is going to be a monthly thing now.

I honestly thought Quicken would do this for me.  There has to be a simple solution, but I can’t see it yet.  If anyone has a similar set of transactions and/or solution for what I need to do, I would greatly appreciate the help!

Thank you in advance for the help!!

Best Answers

  • Jon
    Jon SuperUser, Mac Beta Beta
    edited August 11 Answer ✓
    I can't find the post I was looking for, but I don't think you need it.

    In your IRA account, change the category on the federal tax withholding to "Taxes: Federal Taxes"; change the other withholding to "Taxes: State Taxes". Change the category on the checking transfer to "Transfer: [Checking]".

    When you run the Tax Schedule report, edit the report and on the Accounts tab select the "Selected accounts" button. Add a check mark next to your IRA account. The report should then pick up the tax payments from your IRA account. Save the report so you won't have to remember to do this every month.
    Quicken Mac subscription. Quicken user since 1990.
  • mannyg
    mannyg Member ✭✭✭
    Answer ✓
    Jon -

    I found a thread in the Quicken Windows discuss board on this subject. https://community.quicken.com/discussion/7908279/accounting-for-traditional-ira-withdrawals#latest.  Was this what you were looking for?

    I looks like it will work.  I'll try that and let you know.

Answers

  • Jon
    Jon SuperUser, Mac Beta Beta
    That's the way those withdrawals are going to work because that's how Fidelity does it - they withhold taxes from the IRA account and deposit the net in your checking account. I've been doing IRA withdrawals from a Fidelity IRA for years & that's how it's always been. 

    Seems to me there was a thread somewhere on the forum where folks had worked out how to fix things so the tax withholdings would show up on the tax report but it wasn't trivial. I'll see if I can find it.


    Quicken Mac subscription. Quicken user since 1990.
  • Jon
    Jon SuperUser, Mac Beta Beta
    edited August 11 Answer ✓
    I can't find the post I was looking for, but I don't think you need it.

    In your IRA account, change the category on the federal tax withholding to "Taxes: Federal Taxes"; change the other withholding to "Taxes: State Taxes". Change the category on the checking transfer to "Transfer: [Checking]".

    When you run the Tax Schedule report, edit the report and on the Accounts tab select the "Selected accounts" button. Add a check mark next to your IRA account. The report should then pick up the tax payments from your IRA account. Save the report so you won't have to remember to do this every month.
    Quicken Mac subscription. Quicken user since 1990.
  • volvogirl
    volvogirl SuperUser ✭✭✭✭✭
    If you add the transfer category [Checking] to the IRA account net deposit to checking you will probably end up with 2 deposits in your checking account.  So delete that first uncategorized one in the checking account.
  • mannyg
    mannyg Member ✭✭✭
    Answer ✓
    Jon -

    I found a thread in the Quicken Windows discuss board on this subject. https://community.quicken.com/discussion/7908279/accounting-for-traditional-ira-withdrawals#latest.  Was this what you were looking for?

    I looks like it will work.  I'll try that and let you know.
  • mannyg
    mannyg Member ✭✭✭
    I was able to get this to work just like they describe in the thread I attached above.  I deleted the three individual withdrawal transactions in my IRA account and replaced then with one transfer to my checking account for the gross amount.  In my checking account I deleted the net deposit and then added the correct splits for the gross (transfer) deposit.  

    The upside is that I can schedule the deposit transaction with the splits in my checking account.  That puts placeholder both the checking account and the Ira account for future transactions. The only downside to this is that each month I have to manually delete the transactions Fidelity sends in both accounts and then update the transfer in the checking account if there are any changes in the splits.  It would be better if Fidelity did that on their side when they send the data to Quicken!
  • Jon
    Jon SuperUser, Mac Beta Beta
    The only way they could do that is if they withheld the taxes from the checking account rather than the IRA. Since both accounts are at Fidelity maybe they can process your withdrawal that way, but you'll have to ask them.
    Quicken Mac subscription. Quicken user since 1990.
  • jacobs
    jacobs SuperUser, Mac Beta Beta
    Or… consider not having the taxes withheld when you withdraw from your IRA, and just paying quarterly estimated state and federal taxes. I already make quarterly estimated tax payments because of the income we have from our taxable investments, so including the IRA withdrawals in the calculation of estimated taxes means I achieve the same result with no extra transactions. 
    Quicken Mac Subscription • Quicken user since 1993
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