This is how to get IRA and 401k Withdrawals treated as income in Quicken
I just discovered how to get Quicken to treat withdrawals from IRAs and 401ks as income (so they show up in the tax planner or anywhere else income is reported).
Some of you may already have known this but in my initial search to find out how to do this, I've only seen posts suggesting various work arounds or tricks to force Quicken to show these transfers as income.
Here's what I found:
For each retirement account, open the account detail window (right-click "Edit/Delete Account").
At the bottom click the "Tax Schedule" button.
Select the "Transfer Out" category that fits your situation.
That's it. Now the income shows up in the tax planner under other income.
Let me know if it works for you.
Some screenshots:
Comments
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"I just discovered how to get Quicken to treat withdrawals from IRAs and 401ks as income (so they show up in the tax planner or anywhere else income is reported). (Emphasis added.)"
Under Generally Accepted Accounting Principles (GAAP) a Transfer between balance sheet Accounts (e.g., distribution from IRA Account to Checking Account) is not "income" as it amounts to just moving money from one pocket in your jeans to another pocket. However, under Statutory Accounting Principles (i.e., "Income Tax Accounting") that movement does create "income" that needs to be reported on an income tax return.
So a personal accounting program like Quicken has to be able to work in two worlds at once and the method you've presented here will indeed allow that Transfer to show up as income on income tax related reports, but not "anywhere else income is reported."
If you click on Reports > Spending > Income and Expense by Category and select All Accounts, on the customization screen, you're not going to see the Transfer from the IRA to Checking as any sort of income. The income earned inside the IRA will be in that report, buried in _DivInc or _IntInc or whatever, but not the transfer itself. In order to get that transfer to show up as a form of "income" you need to further modify the report, by deselecting the IRA under the "Accounts" tab of the report's customization screen, but leaving the IRA Account as a Category under the the "Category" tab of the customization screen. That bit of customization will omit income earned inside the IRA from the report (as it should to avoid double-counting of income) but will show the Transfer as a form of income under the Income section of the report. The line item here will read "FROM (Name of IRA Account)."
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Hello @Geobrick,
Thank you for coming to share this information with other users!
-Quicken Jasmine
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See also this thread for other best practices for handling IRA and 401(k) distributions in Quicken
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I get your point about my use of "or anywhere else income it reported." Maybe if I said something like "or anywhere else taxable income is reported". At the time I was doing this, I was focused on trying to get this to show up as taxable income on the tax planner.
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Ah! There it is and it's only taken me 13 years to discover it on my own.
In my initial searches, I only saw multi-step workarounds and tricks. At the time I didn't see the thread you referenced. Maybe I wasn't using the right keywords or sometimes I'll skip over older threads assuming they're no longer relevant.
When I discovered the transfer out setting, I wanted to post it to one of the threads offering the multi-step solutions, but they were locked so I posted it here. Now when someone finds my thread, they'll see your link to the original reference (back in 2010 it seems) so J_Mike gets the credit he deserves.
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@Geobrick I empathize. That IRA distributions FAQ is surprisingly difficult to locate in a search of the forum. I've known it was there for years, but found that I had to pretty much search for its actual verbatim title or content (which I of course had forgotten). Once I finally found it, I bookmarked it both in the forum and in my browser. It won't elude me again. 🤑
Quicken user since version 2 for DOS, now using QWin Biz & Personal Subscription (US) on Win10 Pro.
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