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[Bug] Tax Planner Backup Withholding improperly shown in Self instead of Spouse

SimpleFogey

Greetings:

QWin Classic Business & Personal R68.31

Created category for Backup Withholding, tax-related 1099-MISC, Federal tax withheld as a subcategory of Tax Spouse. The tax planner retrieves the data from the data file, but places the values in the Self, not Spouse category.

Note: normal w2 withholding is properly placed in the spouse column.

Expected behavior: sub categories of Tax Spouse should be in the Tax Planner Spouse column.

Respectfully,

SimpleFogey

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Comments

Quicken Kristina

Hello @SimpleFogey,

Thank you for reaching out! To help troubleshoot, please provide more information:

When did you first notice this issue?
Is your Quicken file located directly on your local hard drive?
- Is it synced with any cloud services, such as OneDrive, iCloud, or Dropbox?
Is the Backup Withholding category used in Paycheck reminders?
- If not, what kind of transactions is it being used in?

I look forward to your reply!

Jim_Harman

The Self and Spouse columns of the Tax planner are driven by the Categories' Tax Line Items, not by the Categories themselves.

The problem appears to be that the 1099-MISC section of the Tax line items does not have separate Self and Spouse line items, so there is only a Federal Tax withheld. Any tax withheld on a 1099-MISC will appear in the Self column of the Tax Planner.

If you and your spouse are filing jointly, this should not make a difference in the tax due.

One workaround to get the spouse's withholding to appear in the correct box in the Tax Planner might be to assign the tax line item for the spouse's backup withholding to Form 1040:Fed tax w/h,RR retire,Spouse.

SimpleFogey

Thank you @Jim_Harman. That perfectly explains the behavior. That Backup withholding should be a one time event. I'll just use the "User entered" instead of QData. Filing jointly, but this specific asset and related expenses are tracked separately.

@Quicken Kristina, I think Jim_Harman conclusively explained it, that the tax line controls Self or Spouse, not the category. If there's going to be two boxes, SELF and SPOUSE, in the Tax Planner UI then there should be ,self and ,spouse tax lines available in the "tax line item for this category."

While you're at it, out of curiosity would you mind asking the team what the last 3 items under the W-2 Tax line items are for? All three are preceded by a : [colon]. Due to the colon, I suspect they are tag related. In general, what purpose do colon preceded lines in Tax Line items serve?

First noticed: not clear

Q file, on local drive, not cloud, not OneDrive cache

1099 Backup withholding, not W-2. Used in a payment where the payor didn't have recipient's taxpayer id yet, so backup withholding was required for that transaction. Shows up on 1099-MISC.

Thank you,

—S

Jim_Harman

If this is a one-time event, entering the withholding amount under User Entered would be a good solution.

To prevent double counting, make sure the Category you use for the withholding does not have another Tax line item. If you mark the Category as Tax related with no tax line item, it will be included in the Tax Summary report but not the Tax Schedule report.

Quicken Kristina

Thank you for your replies,

@Jim_Harman,

Thank you for the detailed description of the problem. I'm not certain why I couldn't replicate it initially, but I tried again and managed to replicate the issue.

I forwarded the issue to the proper channels for further investigation and resolution. If you would like to contribute to the investigation, please navigate to Help>Report a Problem and send a problem report with log files attached.

@SimpleFogey,

I forwarded that question about the line items with the : preceding them internally. I'll reach back out when I receive a response.

Thank you!

(CBT-1270)

Jim_Harman

I have looked further into this and have reported via Report a Problem. Here are some additional details:

The 1099-MISC form is used to report income from rents, royalties, etc., and it would be rare for taxes to be withheld from that income because it is only withheld if the payer does not have a valid Social Security number for the recipient. This is called Backup withholding and is the subject of this discussion.

A bigger problem IMO is the much more common situation of tax withholding from IRAs, 401(k)s, and pensions, which is reported on Form 1099-R. Like the 1099-MISC, Quicken's 1099-R tax line items also do not include separate Self and Spouse lines. Thus for example, withholding from a spouse's IRA must use the generic "1099-R:IRA Federal tax withheld" line item and it will incorrectly appear in the Tax Planner's Self column for Other Withholding.

In either of these situations, I think it would only affect the tax computation if the couple is filing separately, which is uncommon.

SimpleFogey

@Jim_Harman,

Thank you. No risk of double counting. After using the Tax Planner's "View tax form lines used here"* feature, I created a category under Tax Spouse,

Tax Spouse:Backup Withholding
1099-MISC line "Federal Tax Withheld"

After your prompting, I reviewed the category list. That Tax Line item is not used anywhere else.

As you mention the circumstances leading to this are not the norm.

—SF

*Useful feature by the way.

SimpleFogey

Thank you @Quicken Kristina .

The software defect is the mismatch between the Tax Planner UI, two columns, and the lack of corresponding ",self" and ",spouse" Tax line items under Form 1099-MISC . Since the Tax Planner has a Status choice for "Married Filing Separately", I view the proper correction as adjusting the TLIs, uncommon situation or not.

—SF