My roth conversions are not showing up in Tax Schedule report

EmKay · December 2021

Sorry if this has been asked/answered, but the forum's search function won't let me sort by date so I'm not sure...

I have the tax schedule for transfers out set to 1099-R:Total IRA taxable dist. on my traditional IRA.

I have done a number of conversions to my Roth ira by selling shares and withdrawx'ing them from the Traditional to the Roth.

Those conversion/withdrawals are not included under the 1099-R category in the Tax Schedule report.

But they should be, correct?

Boatnmaniac · December 2021

I've never been able to get transfers into the Roth IRA account from the IRA account to be captured properly and completely in all the tax reports and in Tax Planner. It works well when the transaction is set up in a Spending account, just not with a Roth IRA.

If it works well for you, then great. If it does not then you might want to do the following workaround:

First, make sure the IRA has the correct Tax Schedule (see Account Details) for transfers out associated with it. It should be 1099-R:Total IRA taxable distrib. Correct it if it shows anything other than this.
In order for this to work, the transfer out of the IRA needs to go into a spending account, not into the Roth IRA. One option I use is to set up a manual dummy "Cash" account that I've named "Roth IRA Conv Distributions".
In the IRA account enter a Cash Transferred out of Account or a Withdraw transaction for the gross amount of the conversion (i.e., net deposit amount + any tax withheld). This will properly capture the combined amount as the total taxable withdrawal from the IRA.
In the Cash account, enter a transfer to the Roth IRA account for the net amount (after tax) to be deposited there.
In the Cash account, if there was Fed tax withheld, enter a transaction for that and categorize it as _401FedWithheld. Then go to the Category List and check to see what tax line item has been associated with that category . If one has not been associated with it, click on the Edit button on the right side of the list for that category and assign 1099-R:IRA federal tax withheld to it.
In the Cash account, if there was State tax withheld, enter a transaction for that and categorize it as _401StateWithheld. Then go to the Category List and check to see what tax line item has been associated with that category. If one has not been associated with it, click on the Edit button on the right side of the list for that category and assign 1099-R:IRA state tax withheld to it.
Check your tax reports and Tax Planner to confirm the data is properly captured.

One additional thing: If you download transactions from your broker into your IRA account, you might need to make a couple of adjustments there.

Make sure the cash generated from the sale of shares is deposited to the IRA cash balance.
If the broker downloaded transactions for tax withheld: Delete them. (If you do not, then Quicken will show you had tax withheld twice...once in the IRA account and once in the Cash account. And for this to work properly, the tax withheld transaction must be in the Cash account, not in the IRA account.)
If the broker downloaded any cash transfers or withdrawals out of the IRA account, delete them.

This the process I have successfully used for quite a few years. Let me know if you have any questions.

BTW, there is a product improvement idea that has been posted addressing this Roth IRA conversion process: https://community.quicken.com/discussion/7864626/improve-handling-of-ira-distributions-qcds-and-roth-conversions/p1. If you want to see Quicken improve the program for this then be sure to vote for it by clicking on the voting button in that post thread as shown in this example (circled in red):

Boatnmaniac · January 2022

EmKay said:

@Boatnmaniac, before I make the changes you've suggested to use the method that you recommend, I wanted to show you want I'm seeing in the tax planner for this year - I'm not understanding why the highlighted "Annual Total" doesn't equal the circled Quicken YTD Total:

Well, there are quite a few transacations there that aren't shown so I'm not getting a complete picture but my first impression is that what you are seeing is the same issue that I had posted above. Your transactions appear to be transfer deposits into your Roth IRA directly from your brokerage IRA. If I am correct about this, then it validates one of the issues I have been seeing when transferring the Roth IRA conversion money directly into the Roth IRA from the IRA. In both your picture and in mine, those transactions are being itemized but they are not rolling up into the Actual YTD number.

My suggestion: Backup your data file. Then set up that dummy manual Cash Account and follow the process I laid out above. If I am correct, the issue in the picture you posted will go away.

If I am wrong, you can then simply restore the backup file with no harm done. All it will have cost you is a bit of time.

Let me know if you do this and what the result is.

Rocket J Squirrel · December 2021

For unknown reasons, Withdraw doesn't work. Go the other way, and enter a Deposit into the receiving Roth account, transferring from the trad IRA.

Boatnmaniac · December 2021

I've never been able to get transfers into the Roth IRA account from the IRA account to be captured properly and completely in all the tax reports and in Tax Planner. It works well when the transaction is set up in a Spending account, just not with a Roth IRA.

If it works well for you, then great. If it does not then you might want to do the following workaround:

First, make sure the IRA has the correct Tax Schedule (see Account Details) for transfers out associated with it. It should be 1099-R:Total IRA taxable distrib. Correct it if it shows anything other than this.
In order for this to work, the transfer out of the IRA needs to go into a spending account, not into the Roth IRA. One option I use is to set up a manual dummy "Cash" account that I've named "Roth IRA Conv Distributions".
In the IRA account enter a Cash Transferred out of Account or a Withdraw transaction for the gross amount of the conversion (i.e., net deposit amount + any tax withheld). This will properly capture the combined amount as the total taxable withdrawal from the IRA.
In the Cash account, enter a transfer to the Roth IRA account for the net amount (after tax) to be deposited there.
In the Cash account, if there was Fed tax withheld, enter a transaction for that and categorize it as _401FedWithheld. Then go to the Category List and check to see what tax line item has been associated with that category . If one has not been associated with it, click on the Edit button on the right side of the list for that category and assign 1099-R:IRA federal tax withheld to it.
In the Cash account, if there was State tax withheld, enter a transaction for that and categorize it as _401StateWithheld. Then go to the Category List and check to see what tax line item has been associated with that category. If one has not been associated with it, click on the Edit button on the right side of the list for that category and assign 1099-R:IRA state tax withheld to it.
Check your tax reports and Tax Planner to confirm the data is properly captured.

One additional thing: If you download transactions from your broker into your IRA account, you might need to make a couple of adjustments there.

Make sure the cash generated from the sale of shares is deposited to the IRA cash balance.
If the broker downloaded transactions for tax withheld: Delete them. (If you do not, then Quicken will show you had tax withheld twice...once in the IRA account and once in the Cash account. And for this to work properly, the tax withheld transaction must be in the Cash account, not in the IRA account.)
If the broker downloaded any cash transfers or withdrawals out of the IRA account, delete them.

This the process I have successfully used for quite a few years. Let me know if you have any questions.

BTW, there is a product improvement idea that has been posted addressing this Roth IRA conversion process: https://community.quicken.com/discussion/7864626/improve-handling-of-ira-distributions-qcds-and-roth-conversions/p1. If you want to see Quicken improve the program for this then be sure to vote for it by clicking on the voting button in that post thread as shown in this example (circled in red):

EmKay · January 2022

@Rocket J Squirrel - I changed my ContribX transactions in the Roth to Deposit, and now the amounts do show up in the YTD Transactions list of the tax planner. So that's an improvement.

However - the Quicken YTD total is $42K, and the Quicken Data (from 2021) Actual YTD amount is only $9.9K ! @Boatnmaniac, is this a symptom of the problems you found? BTW, I apologize -I now recall asking a question, I think, similar to this, and I think you answered me previously. I'm end-of-year-overwhelmed, and forgot about that. I will definitely upvote your improvement idea.

Boatnmaniac · January 2022

EmKay said:

@Rocket J Squirrel - I changed my ContribX transactions in the Roth to Deposit, and now the amounts do show up in the YTD Transactions list of the tax planner. So that's an improvement.

However - the Quicken YTD total is $42K, and the Quicken Data (from 2021) Actual YTD amount is only $9.9K ! @Boatnmaniac, is this a symptom of the problems you found? BTW, I apologize -I now recall asking a question, I think, similar to this, and I think you answered me previously. I'm end-of-year-overwhelmed, and forgot about that. I will definitely upvote your improvement idea.

First, I suggest you disregard that November Roth IRA conversion response that I had given you. I found a couple of errors in there that I tried to correct but since the thread is closed I cannot do that.

However, the process I provided above is accurate. (Although there is a split category variation of it that can also be used.)

I'm not sure what you are looking at when you said "the Quicken YTD total is $42K and the Quicken Data (from 2021) Actual YTD amount is only $9.9K" so I don't know how to respond to that.

The issues I have found are demonstrated in 2 Tax Planner pictures below. In every test I've done in which I entered a deposit transaction in the Roth IRA account with a transfer from the IRA account I've found that some parts of the data are not captured completely or not at all in one report or another or in Tax Planner.:

Image: https://us.v-cdn.net/6031128/uploads/editor/uk/4fo2wjjeylyp.png

Image: https://us.v-cdn.net/6031128/uploads/editor/ul/4ebg0b0pywsy.png

I have found other issues/inconsistencies in the tax reports as well.

Using a dummy spending account as the go-between in Roth IRA conversions is the only method that I have found in which Quicken captures and properly reports all the data correctly everywhere where it is needed.

EmKay · January 2022

@Boatnmaniac, before I make the changes you've suggested to use the method that you recommend, I wanted to show you want I'm seeing in the tax planner for this year - I'm not understanding why the highlighted "Annual Total" doesn't equal the circled Quicken YTD Total:

Image: https://us.v-cdn.net/6031128/uploads/editor/ir/bbgzf4qitvt7.jpg

Boatnmaniac · January 2022

EmKay said:

@Boatnmaniac, before I make the changes you've suggested to use the method that you recommend, I wanted to show you want I'm seeing in the tax planner for this year - I'm not understanding why the highlighted "Annual Total" doesn't equal the circled Quicken YTD Total:

Well, there are quite a few transacations there that aren't shown so I'm not getting a complete picture but my first impression is that what you are seeing is the same issue that I had posted above. Your transactions appear to be transfer deposits into your Roth IRA directly from your brokerage IRA. If I am correct about this, then it validates one of the issues I have been seeing when transferring the Roth IRA conversion money directly into the Roth IRA from the IRA. In both your picture and in mine, those transactions are being itemized but they are not rolling up into the Actual YTD number.

My suggestion: Backup your data file. Then set up that dummy manual Cash Account and follow the process I laid out above. If I am correct, the issue in the picture you posted will go away.

If I am wrong, you can then simply restore the backup file with no harm done. All it will have cost you is a bit of time.

Let me know if you do this and what the result is.

Rocket J Squirrel · January 2022

I'm seeing the same thing. I have 2 distributions from 2 Trad IRAs, one of which is a Roth conversion. Both were recorded as Deposit transfers. The Roth conversion is the second of the two, and not being counted in the upper total even though it does appear in the Tax Summary report.

Drat. I was hoping the "deposit" method would work in both circumstances, but it does not.

Image: https://us.v-cdn.net/6031128/uploads/editor/f9/hp1r6vr3qkj7.png

EmKay · January 2022

@Boatnmaniac - Took a while, as I did multiple small Roth conversions this year to be sure I was comfortable with the process. I was still struggling to get the totals to match the sum of the detail records, in the tax planner, until I realized that I had to have NO tax schedule associated with "transfers in" on the Roth account - and that my RMDs have to follow a completely different method (I used this: https://community.quicken.com/discussion/7072150/faq-best-way-to-handle-distributions-from-ira).

I really wish that this was not so complicated, and greatly appreciate your help!

markus1957 · January 2022

What you are seeing is Quicken making a guess for 2022 based on 2021 data. How it came up with the guess is anyone's guess but might have to do with the transfer issue.

The main point is it is not relevant. Until you enter a reminder or an actual transaction for 2022 with a tax line that will show up in that section of the planner, Quicken will either use 2021 data or TurboTax data to make the estimate for 2022.

Once you enter a scheduled reminder or transaction for 2022, the 2021 estimate will disappear for the input value in the planner. As RJS indicated, the reminder needs to be an Income reminder to show up in the planner.

Adding- the previous year estimating feature can be useful, but it can also be misleading for substantial amounts from the previous year that are not expected to repeat for the current year. As the year rolls over, each section of the planner needs to be reviewed to determine if the previous year estimates are reasonable or if a scheduled reminder or a User Entered value should be selected instead.

Boatnmaniac · January 2022

EmKay said:

@Boatnmaniac - Took a while, as I did multiple small Roth conversions this year to be sure I was comfortable with the process. I was still struggling to get the totals to match the sum of the detail records, in the tax planner, until I realized that I had to have NO tax schedule associated with "transfers in" on the Roth account - and that my RMDs have to follow a completely different method (I used this: https://community.quicken.com/discussion/7072150/faq-best-way-to-handle-distributions-from-ira).

I really wish that this was not so complicated, and greatly appreciate your help!

Glad to have been of help and that you figured out that transfers into the Roth IRA account are to have no tax schedule associated to it.

Regarding RMDs: Earlier I mentioned that there is a variation of my process for the Roth IRA conversion that uses split categories, instead. That variation is the same as per the RMD process in the link you posted except that you need to transfer the Roth IRA conversion dollars into and out of an intermediary Cash Account. The RMD process does not need that intermediary Cash Account.

My roth conversions are not showing up in Tax Schedule report

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