Tax Planner - How do I account for the end of year mutual fund Divs & Cap Gains

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Ps56k2
Ps56k2 SuperUser ✭✭✭✭✭
edited September 2020 in Budgeting and Planning Tools (Windows)
Was just reviewing the numbers in the Tax Planner... it's all based upon curent YTD numbers, plus the projected recurring numbers.  At this point, I'm showing a large projected refund.... but that's not true.
SO - how can I account for the several large end of year payouts from mutual funds in the form of yearly Divs and Cap Gains.... both of which add to my tax bill - and will go from Refund to Tax Due.


QWin - R54.16 - Win10

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  • Sherlock
    Sherlock Member ✭✭✭✭
    edited September 2020
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    We use income reminders for projecting dividend income but may also tweak the amounts using the Adjustment field or User entered: Annual total.  To estimate qualified dividend distributions from your mutual funds, check the financial institution's web site.

    As we need to pay quarterly estimate tax for both state and federal. we find the Tax Planner isn't really sufficient.  We maintain an annual spreadsheet to handle our tax situation and pull data from an export of the Tax Summary report. 
  • markus1957
    markus1957 SuperUser, Windows Beta Beta
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    I use scheduled reminders for regular recurring dividends/interest and a special year end reminder that adds an estimate for cap gains and the usually larger Q4 dividend from mutual funds.
  • Ps56k2
    Ps56k2 SuperUser ✭✭✭✭✭
    edited September 2020
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    markus1957 said:
    I use scheduled reminders for regular recurring dividends/interest and a special year end reminder that adds an estimate for cap gains and the usually larger Q4 dividend from mutual funds.
    I'm trying to see how to account for the large amounts generated at the end of year.
    Since the Tax Planner has the current YTD, and then just "projects" forward, it doesn't know anything about the end of year amounts....
    So - I may investigate the suggestion from @Sherlock
    I'm trying to gauge my next ES-1040 amount... based upon the overall Tax Planner.
    We use income reminders for projecting dividend income but may also tweak the amounts using the Adjustment field or User entered: Annual total.  To estimate qualified dividend distributions from your mutual funds, check the financial institution's web site.


    QWin - R54.16 - Win10

  • markus1957
    markus1957 SuperUser, Windows Beta Beta
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    As for unequal ES-1040 payments, the next one accounts for Q3 income.  The January payment encompasses Q4 at which time, year end cap gains will have been distributed.  That said, if you hold the same investments over many years, you get a sense of what to expect in terms of year-end cap gains.

    A while back, I shifted over to more index funds in taxable accounts to avoid the cap gains surprise at year end.
  • Ps56k2
    Ps56k2 SuperUser ✭✭✭✭✭
    edited September 2020
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    I went back and looked at the Register for my mutual funds,
    and added up the end of year Cap Gains -
    and then entered it as an "Adjustment" -
    Last couple of years, I've gotten hit by some profit taking....
    along with the "turnover" rate of some mutual funds creating large Cap Gains.
    I thought that was my main problem - but it really was more of that AND the Ordinary Divs generated from my "safe" positions AND interest from my CDs.   So, if not a Qualified Div - then you might get tossed out.... and I have also migrated from normal interest bearing CDs over to Vanguard Muni funds.
    BTW - I tend to look for financial discussions over on the Vanguard Bogleheads -


    QWin - R54.16 - Win10

  • markus1957
    markus1957 SuperUser, Windows Beta Beta
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    Estimate Based on YTD Average is only going to be useful in situations where income generated is consistent both in value and frequency.  Income reminders are the most useful means of producing projections.
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