Does quicken allow a transaction in the check registry to be back dated?

three_jeeps

I made some check entries via the online center on 1/1/2024 and did the update with my bank. The checks show in the register with the date of delivery, e.g. 1/5/2024. I'd like to change the date in the check register to 12/31/2023 for those checks. It appears that quicken will allow me to do that, and the check will show up in my itemized expenses for 2023. My question is, will this 'break' anything in quicken? cause any confusion?

What is the best way to 'back date' a check in quicken?

Thanks

Boatnmaniac

It shouldn't break anything in Quicken (which is very flexible in this regard) but unless you actually paid them in 2023 it might break you with the IRS. If the IRS were to audit your tax return you would need to show that the payments were actually processed (i.e., the check was mailed or the ACH payment was sent) by the bank in 2023. But as long as the bank mailed the checks or sent the ACH payments not later than 12/31/2023 then you should be good in Quicken and with the IRS.

splasher

You could put any date you want on a transaction in Quicken and it won't care, but don't figure on using that as proof to an auditor that the date was correct, that requires something from the recipient with the correct date on it.

NOTE: I AM NOT A TAX PROFESSIONAL

three_jeeps

Thank you for the feedback, much appreciated.

Boatnmaniac

…that requires something from the recipient with the correct date on it.

While something from the recipient with the correct date on it can certainly be very helpful in working with an auditor, the IRS does not require that provided there is some evidence that you processed the payment not later than 12/31/2023.

If you hand write out a check with the date of 12/31/2023 on it but don't actually mail it until 1/5/2024, the IRS will accept the 12/31/2023 date as "proof" of a 2023 tax deductible expense.

In this case, since the bank is processing the payments, at a minimum the bank would need to provide evidence that they processed (dated/mailed or sent the ACH) payment not later than 12/31/2023.

Rocket J Squirrel

If you hand write out a check with the date of 12/31/2023 on it but don't actually mail it until 1/5/2024, the IRS will accept the
12/31/2023 date as "proof" of a 2023 tax deductible expense.

I don't think so, @Boatnmaniac . The general IRS rule is that the funds must no longer be available to you, which is the case the moment you mail the check. If you date the check 12/31/23 but don't mail it until 1/5/24, that's no good for tax year 2023. Pub 526 says

A check you mail to a charity is considered delivered on the date you mail it.

But it sounds like @three_jeeps is trying to cheat. That won't work in this case, since the bank didn't get the transactions until 1/1/24. Or maybe this has nothing to do with taxes and he or she just wants to account for the transactions in 2023. That's fine.

Chris_QPW

This is one of the things that sort of always puzzled me about some of the comments in Quicken on this kind of thing.

I was always under the impression that Quicken couldn't be used as "proof" for the very reason that you can change it without any record. But then people on this forum said, no that isn't true the IRS will accept Quicken records as proof.

I have a feeling that it is more like, one of the two. A) People are guessing and don't really know. B) (and more likely) Just like any paper record that could be forged, the IRS will at first take the Quicken records at face value, but if for any reason they find something "inconsistent" they will dig, and the real proof will have to be in some kind of records outside of Quicken.

Luckily most of us will never be audited and find out.

Rocket J Squirrel

@Chris_QPW I agree with you. But IRS is not really - or shouldn't be - after anyone who's poor enough to use Quicken. Except maybe Eric :)

Boatnmaniac

@Rocket J Squirrel -

If you hand write out a check with the date of 12/31/2023 on it but don't actually mail it until 1/5/2024, the IRS will accept the 12/31/2023 date as "proof" of a 2023 tax deductible expense.

I don't think so, @Boatnmaniac . The general IRS rule is that the funds must no longer be available to you, which is the case the moment you mail the check. If you date the check 12/31/23 but don't mail it until 1/5/24, that's no good for tax year 2023. Pub 526 says

True, it's not legal to date the check in 2023 but not mail it until 2024. That would be tax fraud which the IRS is known to "frown" upon and something I have never condoned doing. But the IRS will generally accept the 12/31/2023 dated check as the "proof" that the payment/contribution was made in 2023 even if it is mailed a few days into the new year provided the recipient receives the check within a reasonable amount of time for mail delivery. Now, not mailing the check until late January or February is more likely to catch the unwanted attention of the IRS than a 1/5/2024 mail date would.

https://community.quicken.com/discussion/comment/20409112#Comment_20409112

I also think it has a lot to do with what the value of the deduction is and what benefit there would be to the IRS to challenge the use of Quicken data. The IRS is not going to spend time fighting about the relatively small stuff. They are looking for big value discrepancies that are going to raise enough revenue to make it worth their time and effort. So, will they accept the Quicken reports? In many cases, I think so.

BTW, I did get audited by the IRS twice. The first time was simply a stupid mistake on my part nearly 40 yrs ago when the importance of detail and double check the numbers went right over the top of my head. So I paid the additional tax due and penalty without even contesting it.

The second time was for the first year that I exercised employee stock options. The exercise value was $150K but after accounting for the grant value only $25K of that was my gain. That $25K gain and withheld tax was included in the W2 form I got from my employer but I must have messed up on the tax return, again, because the IRS said I failed to report $150K in capital gains and that I owed them $55K in additional taxes! I had a huge lump in my throat when I first saw their letter! But it was easy to figure out what had happened and to provide all the necessary documentation and explanation letter to the IRS. I asked them if I needed to submit an amended return. A few weeks later all I got was a letter from the auditor stating that the audit case was closed. Whew!