Properly Record Federal Tax Withheld From Mutual Fund IRA Distribution

Robert Kassnel
Member ✭✭✭
I am selling some IRA mutual fund shares and having federal taxes withheld. Two transactions are downloaded each representing shares sold. I easily figure out how to get the net proceeds posted into my bank account, but I have no idea how to record the federal tax into my Tax: Fed category and thereby get it out of the Cash Balance for the mutual fund. Can someone help with a step-by-step process that begins with how to correctly edit (if necessary) the downloaded transaction that represents the shares sold for purposes of federal taxes? Thanks.
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Comments
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Delete the cash entries in the IRA. Over in the checking Account split the net deposit. In the first split line gross up the the amount to the pre-tax number and record that line as a transfer out of the IRA. Then in the second line record the tax amount as a negative number, with the Fed tax Category. That will leave the net deposit unchanged, the cash will be zeroed out in the IRA.
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@Robert Kassnel - As you've noticed, Quicken does not manage retirement account distributions properly. There is a Product Idea requesting that this be improved upon: Improve handling of IRA distributions, including QCDs and Roth conversions. If you like the idea, please be sure to vote for it.There are a couple of workarounds to get Quicken to properly capture the gross distribution amount, the net distribution amount and the taxes withheld amount. The one mentioned by @Tom Young is considered by many to be a best practice and one which I use. It works really well in getting the data captured properly in the Tax Reports and in Tax Planner.Let us know if you have any questions about it.
(Quicken Classic Premier Subscription: R52.33 on Windows 11)
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Thank you both. I did cast my vote for Product Idea.1
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