How do you clearly identify Income in IRAs?

atstephan3@

How do you clearly identify Income in IRAs? In my Quicken Business & Personal, Version 853.32, Build 27.153.32, running on Windows 11 Home, I have four IRA accounts and one non-IRA Investment account. One of the four IRA accounts is a recently established Roth IRA. The three regular IRA accounts are set up in the “Account Details” dialogue as follows:

Account Type: Traditional IRA

Tax Deferred: Yes

Single Mutual Fund account: No

Tracking Method: Complex

The Roth IRA differs in only one way: Account Type: Roth IRA.

On January 1st, I created an “Income/Expense by Category” report for the prior year. It produced one strange result. It showed a separate line labeled “Roth-IRA Income” with a total that did not include all the dividends received into the Roth. Examining the Roth account details, I found that the “Action” selection for the Value reported as “Roth-IRA Income” was “Deposit,” and for the dividends that were not included, the “Action” was listed as “div.”

My first instinct was to try to change the “Div” action to “deposit.” However, the Action drop-down menu did not offer or allow me to make this change. Usually, I manually enter investment transactions from my brokerage accounts on the day they occur. My entries are confirmed or corrected the next day when I use One Step Update every morning. I believe that Quicken created the “Deposit” action types for dividends that I didn’t take the time to record the prior day and that the “Div” action was what I created when I manually entered the transactions the day before. The Downloaded Transactions list must have shown the “Div” action as a “Match.”

Since we are starting a new year, I would like to:

Be able to change “Action,” “Div,” to “Deposit,” or better yet.

Select from new “Action” classes.”

Div Taxable, Div Roth-nontaxable, Div IRA-Pre RMA, and Div IRA-RMA.

The same changes should be made under ReinvDiv.

ReinvDiv Taxable, ReinvDiv Roth-nontaxable, ReinvDiv IRA-Pre RMA, and ReinvDiv IRA-RMA.

At a minimum, please update the pulldown menu to allow the change from “Div” to “Deposit.”

It would benefit all Quicken users if they could create investment income reports that distinguish between the various types of taxable and nontaxable income/transactions. Perhaps this can be done with the Quicken software that I currently have. If there is a way, please let me know what I need to do to separate these income classes.

Quicken should also consider establishing “Action” types that separate types of withdrawals. For example:

Withdraw IRA RMA, and WithdrwX IRA RMA.

This would allow users to track how they are moving toward fulfilling their RMA requirements.

Thanks in advance for your help.

Sincerely, Arthur Stephan

Jim_Harman

Is the "income" that you want to track the taxable distributions that you have received from your IRA accounts? That is different from income such as dividends that is generated by the securities in the IRA account, or non-taxable distributions from a Roth account.

If so, there is a specific procedure you must use when you enter these transactions in order for them to be recorded correctly in Quicken's Tax reports.

In the IRA, click on the gear at the top right and select Edit account details. Click on Tax Schedule and set Transfers out to 1099R: Total IRA taxable distrib., like this:

For the taxes to be recorded properly in Quicken, the transfer must be entered as a transaction in the receiving account. It can be a banking or an investing account, but it must be taxable, not another IRA for example.

In the receiving account:

1)  Enter a Deposit transaction for the net amount of the RMD...a positive number.

2)  Split the category:

• Line 1 of the split:  Category =  the IRA account name in [square brackets] and the gross distribution amount...a positive number.
• Line 2 of the split:  Category = the Fed taxes withholding category that you use...a negative number.
• Line 3 of the split:  Category = the State taxes category that you use...a negative number.
• Total of the split:  Must equal the net amount of the deposit.

If you receive the distributions regularly, you can set this transaction up as an Income Reminder.

In the IRA account:  Delete any downloaded brokerage transactions for

• The net distribution
• The Fed taxes withheld
• The State taxes withheld

With this setup, the taxable income will be shown in the “1099-R Total IRA Taxable distrib.” section of the Tax Schedule report.

If you would like Quicken to make this process simpler, please review, comment, and vote on this Idea post.

https://community.quicken.com/discussion/7864626/improve-handling-of-ira-distributions-including-qcds-and-roth-conversions