How To Categorize Monthly Disbursement from Broker Account

Faroe47

Each month I have my broker send me funds from which I pay my bills. The money comes from cash accounts with the broker. I don't feel it should be classified as "income," since I'm not generating income in my accounts other than from trades, dividends and interest. And those activities are clearly identified when Quicken sees them. I want to be able to take my monthly disbursement and show it clearly in my Budget as funds used to pay expenses — but not to tag it as income. I don't want it mixed in with real income from investments that my tax person gets from me at tax time. I also wish it would show on my Dashboard as funds available to pay bills, but — again — not as income.

NotACPA

@faroe47 What account are those monies going into … and why isn't this a simple transfer?

And, transfers aren't income. If such exists in QMac, you might want to look at a Cash Flow report rather than Income/Expense.

jacobs

@Faroe47 When your broker sends you funds, how exactly is that done? Do you mean a transfer from your brokerage account to a checking account, or something else? If it's a transfer, it should NOT be categorized. As you note, it is not income; it's just moving a cash asset from one account to another. As you subsequently pay the bills from your checking account, those are your expenses — and they show up as such in your budget.

In your budget, if you wish to see the transfer, you can add the transfer to your budget. I'm just not sure why you would want to, since it is not income and the expenses are already properly there.

If you just want to know what funds you have available to pay bills, isn't the value of the account in the left sidebar showing you that?

In the Dashboard, you want to see the funds available — well, that's a value of a fund. So it you wanted, you'd use the Net Worth card for this; just click the ••• icon in the upper right, click on Accounts, click Clear All, and then check only the account you use for paying the bills. Now the Net Worth card will show the value in this one account over whatever time interval you select. (You can also edit the name of the card from "Net Worth" to "Bill Payment Funds" or the name of the account.

Faroe47

Jacobs,

 "If it's a transfer, it should NOT be categorized."

It is, definitely, a transfer from the broker. I have not been tagging it as a "TXFR." I will do now.

I have been accepting incoming funds into my bank transaction checking account, where I pay all my bills. But I have been setting the category as the name of the bank checking account, which Quicken always flags with a reminder that I'm recording a transaction back to the same account it's already in.

How should I show the Category? Is it OK to save it back to the same account; just use the TXFR tag?

I should mention that whenever I record the transaction back to the same account, the Category name of the account is in brackets [xxxxxxxxx]. So, that means it's already recorded as a Transaction and NOT being ID'd as Income.

I'm going to have to play around with the Budget and, obviously, the Dashboard.

Thanks

UKR

In Quicken, a transfer is defined as a move of funds between two accounts.
To do so correctly, designate the "other account" as the transfer-to/from Category.
For example, in your brokerage account select the Checking account as the Transfer-to category, in [brackets].
This creates a matching transfer transaction to deposit the money into your checking account.

When you download transactions from both accounts and the transfer appears in the download: Quicken should be able to recognize and match the downloaded transactions in either account and not create duplicates. If it does, because it somehow couldn't figure out the match, drag and drop the downloaded transaction over the already existing register transaction, to eliminate the duplicate.

volvogirl

Let me back up and ask a question. Do you have the brokerage accounts in your Quicken file? Then it's a transfer from the broker account to your checking account. You don't need to make a separate entry in the checking account. It should be a transfer starting from the broker account.

If you don't have the broker accounts in Quicken then it usually should be categorized as a "transfer" back into the same checking account like you were doing. It is a one sided transaction. Unless you want to set up a category for it or put it in a taxable income category.

Faroe47

Volvogirl,

I think that you have hit on my problem. Years ago, I put my brokerage accounts into Quicken. It proved too much for me to keep up with. So, as you surmised, the influx of funds from the "broker" comes directly from them as a deposit to my bank account. I do not have a Quicken account established for the brokerage firm. Even so, I'm not so sure I could set one up, since the funds are being distributed by their cash-holdin entity, the Royal Bank of Canada (RBC). I tried to establish a Quicken cash account for that particular IRA account, but even after applying my ID and passwords used for accessing the accounts via the broker, I couldn't make the link. I guess I'll just keep on with depositing the funds back to the same account.

volvogirl

I would be inclined to set up a new category for "Broker Disbursements". Then you can keep track of them.

jacobs

The simpler option than what @RickO suggested is to ignore the brokerage account entirely in Quicken, as you have been doing. The entry of each transfer into your checking account would use the special category "Transfer". Note there are is no bracketed account name to specify the source of the transfer; just plain "Transfer". This special category in Quicken is for exactly your situation: money comes in from (or goes out to) somewhere that is not tracked in Quicken. So the special "Transfer" category creates the funds coming in, without it being either income or expense.

You mention a tag of "TXFR". That is not something Quicken does, or needs. You can do it if it helps you identify your transfers more readily, but it is not needed.

Ps56k2

tried to establish a Quicken cash account for that particular IRA account….

Is this some form of a US retirement account that you are taking monthly withdrawals ?