Home Quicken for Mac Errors and Troubleshooting (Mac)

Financial Category, chose Schedule A but item does not appear in Tax Schedule Report

Ken W.Ken W. Member ✭✭
Using Quicken Mac 2017, 4.6.8. Need to deduct my Financial Advisor fee on my tax return. In Category I've chosen Financial -> Financial Advisor -> Schedule A -> Investment Management Expenses. When I produce a Tax Schedule Report the Financial Advisor fees do not appear the the Report. I've triple-checked everything and yet cannot get the Financial Advisor Fees to appear. Help! I need this to prepare my 2017 Tax Return.

Comments

  • Ken W.Ken W. Member ✭✭
    edited October 2018
    A sudden realization. Forgot to add what might be a critical fact. I have the Advisor Fees paid directly out of an IRA account. As I understand it, Quicken automatically does not include IRA transactions in tax reporting. Could this be the source of my problem? If so, what workaround is possible.
  • RickORickO SuperUser ✭✭✭✭✭
    edited February 2018
    Ken W. said:

    A sudden realization. Forgot to add what might be a critical fact. I have the Advisor Fees paid directly out of an IRA account. As I understand it, Quicken automatically does not include IRA transactions in tax reporting. Could this be the source of my problem? If so, what workaround is possible.

    You are correct, they won't show in the Tax Schedule report if they're in an IRA. So use a New Report > Transaction Summary instead and customize for the category(s). 

    That said, I don't think you can deduct financial advisor fees paid directly out of an IRA. Reason: you are paying with pre-tax dollars, so those dollars will never end up getting taxed. The way my financial advisor explained it, I could pay the fees from my checking account and deduct them, maybe getting some benefit after deduction limitations, alternative minimum tax, etc. OR, I could pay them out of the IRA with pre-tax dollars, avoiding 100% of the tax on those dollars forever, but not being allowed to deduct them.

    So, you may want to check with your financial or tax advisor on this.
    Quicken Mac Subscription; Quicken Mac user since the early 90s
  • J_MikeJ_Mike SuperUser ✭✭✭✭✭
    edited February 2018
    Ken W. said:

    A sudden realization. Forgot to add what might be a critical fact. I have the Advisor Fees paid directly out of an IRA account. As I understand it, Quicken automatically does not include IRA transactions in tax reporting. Could this be the source of my problem? If so, what workaround is possible.

    I am not a tax advisor but it is my understanding that advisor fees paid solely from a tax-deferred account (e.g., IRA) are not deductible.
    There is a work-around in which one pays the fees using funds from an outside (not tax deferred) source.

    See this link: https://ttlc.intuit.com/questions/1900339-can-i-deduct-ira-management-fees

    As always, check with you professional tax advisor. Advice given here is worth exactly what you paid for it - zip - nada - nothing!!
    QWin & QMac (Deluxe) Subscription
    Quicken user since 1991

  • Ken W.Ken W. Member ✭✭
    edited March 2018
    Rick O and JM: Thank you for your replies. I hope you are in error. But, since tomorrow is a holiday for some (President's Day) I may not be able to reach my financial advisor/tax preparer. This will prove interesting since I requested  that my financial advisor withdraw their fees directly from my IRA account some time ago. You'd think they would have warned me not to do that if the expense was not deductible. I will, of course also check with my tax advisor too and let the Forum folks know the news.
  • Unknown Member
    edited February 2018
    Ken W. said:

    Rick O and JM: Thank you for your replies. I hope you are in error. But, since tomorrow is a holiday for some (President's Day) I may not be able to reach my financial advisor/tax preparer. This will prove interesting since I requested  that my financial advisor withdraw their fees directly from my IRA account some time ago. You'd think they would have warned me not to do that if the expense was not deductible. I will, of course also check with my tax advisor too and let the Forum folks know the news.

    From TurboTax:

    Management fees paid through the IRA account cannot be deducted. They simply reduce the value of your IRA.

    On the other hand, management fees paid by cash or check and are not deducted from the IRA can be deducted as investment expenses.

  • RickORickO SuperUser ✭✭✭✭✭
    edited February 2018
    Ken,

    Even if not deductible, you might still want to have them paid directly from the IRA. As I tried (not very well, I guess) to explain above... by paying them from the IRA, you avoid tax on that money altogether. If you pay them from outside-IRA funds, you only get a deduction. Generally speaking, avoiding tax on X dollars altogether beats getting a deduction of those dollars. 

    There may be exceptions, so as JM says, consult your tax advisor.
    Quicken Mac Subscription; Quicken Mac user since the early 90s
  • Ken W.Ken W. Member ✭✭
    edited March 2018
    Mea Culpa! All respondents were "right on". They and Quicken 2017 are smarter than I. I checked with my Tax Advisor and he not only confirmed that paying from the IRA is not taxable but is also not a tax-deductible expense. He ended his comments with the fact from here on it doesn't make any difference. Investment Advisor fees are no longer taxable starting in 2018!

    The only question I have now is will Quicken 2017 be updated to reflect the new tax laws?

    One final question: How do I mark this thread as SOLVED?
  • Unknown Member
    edited February 2018
    Ken W. said:

    Mea Culpa! All respondents were "right on". They and Quicken 2017 are smarter than I. I checked with my Tax Advisor and he not only confirmed that paying from the IRA is not taxable but is also not a tax-deductible expense. He ended his comments with the fact from here on it doesn't make any difference. Investment Advisor fees are no longer taxable starting in 2018!

    The only question I have now is will Quicken 2017 be updated to reflect the new tax laws?

    One final question: How do I mark this thread as SOLVED?

    Quicken 2017 will only have tax laws setup for the previous year and current year version.  It's always been that way since Quicken added the Tax Planner

    Thus, Quicken 2017's Tax Planner only works for tax years 2016 and 2017.

    So no...Quicken 2017 will NOT be updated to reflect the new tax laws.

    If you want the current tax year, you'll need to upgrade to the subscription Quicken.  And since it's a subscription if you purchase a 2 year or 27 month subscription now, you'll get the Tax Planner to work for 2017, 2018, eventually 2019 and 2020.  
  • RickORickO SuperUser ✭✭✭✭✭
    edited February 2018
    Ken W. said:

    Mea Culpa! All respondents were "right on". They and Quicken 2017 are smarter than I. I checked with my Tax Advisor and he not only confirmed that paying from the IRA is not taxable but is also not a tax-deductible expense. He ended his comments with the fact from here on it doesn't make any difference. Investment Advisor fees are no longer taxable starting in 2018!

    The only question I have now is will Quicken 2017 be updated to reflect the new tax laws?

    One final question: How do I mark this thread as SOLVED?

    Ken, did you mean to say that Investment Advisor Fees are no longer tax deductible in 2018?
    Quicken Mac Subscription; Quicken Mac user since the early 90s
  • ConcordmanConcordman Member ✭✭✭✭
    edited February 2018
    Ken W. said:

    Mea Culpa! All respondents were "right on". They and Quicken 2017 are smarter than I. I checked with my Tax Advisor and he not only confirmed that paying from the IRA is not taxable but is also not a tax-deductible expense. He ended his comments with the fact from here on it doesn't make any difference. Investment Advisor fees are no longer taxable starting in 2018!

    The only question I have now is will Quicken 2017 be updated to reflect the new tax laws?

    One final question: How do I mark this thread as SOLVED?

    Here is an interesting article discussing tax law changes for 2018


    https://www.fool.com/taxes/2017/12/24...
  • RickORickO SuperUser ✭✭✭✭✭
    edited February 2018
    Ken W. said:

    Mea Culpa! All respondents were "right on". They and Quicken 2017 are smarter than I. I checked with my Tax Advisor and he not only confirmed that paying from the IRA is not taxable but is also not a tax-deductible expense. He ended his comments with the fact from here on it doesn't make any difference. Investment Advisor fees are no longer taxable starting in 2018!

    The only question I have now is will Quicken 2017 be updated to reflect the new tax laws?

    One final question: How do I mark this thread as SOLVED?

    Yeah, okay, so I was right... Ken meant to say (or his advisor meant to say) that Investment Advisor Fees are no longer tax deductible

    So, Ken, that makes taking the fees directly out of the IRA the definite choice. (Your advisor is wrong if he says it doesn't matter.) Think of it... Say you have $1000 in investment advise fees this year. You pay it directly out of the IRA. The money in that IRA has not yet been taxed. So that $1000 you pay out of the IRA will never, ever be taxed.

    On the other hand, if you pay the $1000 out of your pocket, you will have already paid taxes on that money. And there is no longer any deduction to offset those paid taxes. The $1000 that you didn't pay from the IRA eventually gets taxed when you withdraw it. 

    Bottom line, paying the fees directly from the IRA avoids taxation of that money.
    Quicken Mac Subscription; Quicken Mac user since the early 90s
  • Ken W.Ken W. Member ✭✭
    edited February 2018
    Ken W. said:

    Mea Culpa! All respondents were "right on". They and Quicken 2017 are smarter than I. I checked with my Tax Advisor and he not only confirmed that paying from the IRA is not taxable but is also not a tax-deductible expense. He ended his comments with the fact from here on it doesn't make any difference. Investment Advisor fees are no longer taxable starting in 2018!

    The only question I have now is will Quicken 2017 be updated to reflect the new tax laws?

    One final question: How do I mark this thread as SOLVED?

    Totally agree and thank you for the clarification.
This discussion has been closed.