How do i record Federal Withholding Tax

eshoaff

I manually enter transactions in my investment account. In May of this year IPG, Investment Placement Group, started withholding Federal tax on dividends. I would like to record these transactions. Since the Enter Transactions window doesn't have anything that is specific to this, How should I go about this? Any suggestions?

Tom Young

Enter the GROSS amount of the dividend, i.e., before the withholding of taxes. Then using a MiscExp action enter the taxes withheld with the proper Category.

Boatnmaniac

What I've done in the past:

1. Create a new category for the withheld tax. Here is how I've structured my Tax categories and sub-categories. See the sub-category highlighted in yellow and note the Tax Line Item to associate with it.
   
2. Enter the "MiscExp" transaction in the investment account as suggested by @Tom Young above using this new tax category. Or you can enter a "Withdraw" cash transaction with this new tax category, instead (that is how I did it).

By doing it this way the withheld tax will be captured properly in the tax reports and in Tax Planner (under Withholding:Other Withholding).

Tom Young

Enter the GROSS amount of the dividend, i.e., before the withholding of taxes. Then using a MiscExp action enter the taxes withheld with the proper Category.

Boatnmaniac

What I've done in the past:

1. Create a new category for the withheld tax. Here is how I've structured my Tax categories and sub-categories. See the sub-category highlighted in yellow and note the Tax Line Item to associate with it.
   
2. Enter the "MiscExp" transaction in the investment account as suggested by @Tom Young above using this new tax category. Or you can enter a "Withdraw" cash transaction with this new tax category, instead (that is how I did it).

By doing it this way the withheld tax will be captured properly in the tax reports and in Tax Planner (under Withholding:Other Withholding).

eshoaff

Thanks for both answers. It is working for me.