Tax Planner vs TurboTax - Divs & Cap Gains - vs 1099 & Tax Due

Ps56k2 · February 17

Got all our 1099 info and Imported them directly into TurboTax -

The Quicken Tax Planner had my Tax Due quite a bit higher than what TTax is now showing.

I'm going to review the 1099 line items
and the Quicken Tax Planner numbers vs TTax to see where the issues are.

the Divs being Short/Long in Quicken - and Qual vs Ord in TurboTax - should be close -

Cap Gains is another area - but may be related to choosing Avg Cost in Quicken vs what is actually being done at the brokerage - again, the 1099 review will show the real numbers ….

Just thought I would toss this topic out there - and will follow up with what we find -

NotACPA · February 17

Avg cost vs. specific lots will certainly result in differences.

Ps56k2 · February 18

started looking at the various Quicken reports - and basically gave up trying to match any Quicken numbers to their 1099s -

Some of the DIVS matched - and some didn't - and hard to compare Qual Divs + Ord Divs to the Quicken _DivInc numbers

With Cap Gains - its even worse…. and it may be because of some mutual funds going thru a Mutual Fund Class Conversion.
So one was off by a couple hundred, 9,600 vs Quicken 9,300
and another was off by a thousands 58,480 vs Quicken 70,399

markus1957 · February 18

FWIW, Quicken will provide pretty accurate estimates of investment income taxes but it takes a little effort to help it get there. You have to provide a good ballpark Qual Div value which is usually not that difficult to do. You also need to track holdings' cost basis using the same method as your broker; if they use FIFO you need to use that in Quicken.

LTCG should not be an issue except for the case when you have long held mutual funds that are tracked as average cost and are also listed as non-covered by your broker. The broker treats those as 2 lots for purposes of average cost. Also, sometimes LTCG distributions get coded by the broker in the download as divs so you need to be on the lookout for that to correct it.

Individual bonds have issues with amortized premiums and accrued interest paid so you need to keep up with those.

The calculations used by Quicken do not materially differ from TurboTax. TT handles more complex situations but so far what you have described is the difference between the meticulous handling of transactions by your broker and your methods of maintaining the same data in Quicken.

Q97 · February 18

LTCG should not be an issue except for the case when you have long held mutual funds that are tracked as average cost and are also listed as non-covered by your broker. The broker treats those as 2 lots for purposes of average cost.

For this case, I created another offline Quicken investment account and moved the non-covered shares into it. This should allow Quicken to agree with the broker on the different average costs for the covered vs non-covered shares. I need to include both Quicken accounts in reports to see agreement with the broker account totals.

Ps56k2 · February 18

So … just to see a complete empty baseline TurboTax IMPORT….

Created a new TTax file - with no copied data from previous TTax files
Import from Quicken into TTax -
Was forced to update Quicken to latest release to get past TTax message requiring the latest release
Did the Import -

WOW - lots of eye opening issues with where the numbers went - what needed to be corrected -
all the missing text that comes with a 1099 import, and all the other embedded info that is missing.

Here is one anomaly - how to handle a 1099 that has "withholding" -
Where in Quicken do you have that Category AND a related TAX LINE ITEM other than for a W2.
The Quicken category that we had selected was actually for the W2 - so a W2 form was created in TTax which really confused me.

The ES-1040 payments were captured EXCEPT for the "next January" entry for 1/3/24 - it was empty

Still digging thru the 1040 and comparing - and finding where the numbers are actually getting created….

mshiggins · February 19

@Ps56k2

What is your goal? One of my goals with using Quicken is to have accurate estimates for my taxes so I don’t have to wait for 1099s or TurboTax. For those estimates to be accurate requires choosing appropriate transaction types and correct categorization, along with reporting. If you just take whatever transactions your FI downloads, I don’t think your tax estimates will ever be accurate.

Ps56k2 · February 19

my goals are similar - just trying to see where the pitfalls are and what I need to change, correct, or edit -

I'm still curious how and where to have Quicken record a split deposit withholding amount - that will become a reported 1099 -
all I see for Category tax line items relate to a W2 - which is how I was recording these payments -

This split would also happen for Divs & Interest and Savings Bonds cashed in - that have Fed Withholding taken out -

mshiggins · February 19

What split deposits do you have? Social security? RMDs? Something else?

Ps56k2 · February 19

https://community.quicken.com/discussion/comment/20418612#Comment_20418612

I've been tracking some other family members finances in Quicken -
but the only "withholding" that I see - is from a Teacher Retirement with their 1099-R …..
which I've been tracking with the W2 Categories…. like the Payroll Wizard -
It was just informational in the Category report - UNTIL - I tried the experiment with Importing Quicken into TTAX to see the flow…
that is when the W2 popped up erroneously - but got me thinking…. WHERE do I split out their Pension withholding

I don't have any other types of 1099 accounts or income streams -
but as noted they all "could" have been created and have "withholding" taken out as per - 1099 - BOX 4 - FED TAX WITHHELD

Ps56k2 · February 19

Here's another interesting tidbit - EXEMPT INTEREST / DIVS -

Have a Vanguard Muni Fund - setup as [x] Tax Free -
The Quicken Tax Planner doesn't seem to have a box for this type of entry ?
Did I miss it ?
therefore - there is no flow into TurboTax for these amounts…. they are just blank
…
HOWEVER - Quicken does in fact collect via a Category - and can display the correct total via Investment Income Report -

markus1957 · February 20

When provided with accurate information, Tax Planner is an accurate forward looking tax estimator and at year end can provide an accurate estimate of tax obligation.

As an import source for filing a tax return, it should be secondary to sources that provide 1099 forms directly to the IRS. Use imports from 1099 sources first in TT and only use Tax Planner as an import source for items that otherwise require manual input like charitable contributions.

Tax Planner's performance importing to TT has no relationship to its performance estimating tax obligations.

Ps56k2 · February 20

I have been using Tax Planner for gauging our ongoing tax situation - with some speed bumps….
I would add extra amounts into the "adjustment" boxes to anticipate the end of year mutual fund Cap Gains.

Some mutual funds create end of year Cap Gains distributions -
so I have to wait until end of December to see those numbers,
and then adjust my January (previous year) ES-1040 estimated tax payment -
Quicken can't always determine Qualified Divs vs Ordinary Divs -
Cap Gains are a puzzle - if generated from mutual funds with no external Buy/Sell transaction to reconcile the actual gain -
…

The TurboTax Import as mentioned - is a different discussion - but somewhat related.
As I've discovered, there are certain items that Quicken doesn't know how to pass along to TurboTax - so they disappear.
- Tax Exempt interest
- Qual Divs vs Ord Divs
- 1099 distributions and related Fed Withholding
-

Chris_QPW · February 20

https://community.quicken.com/discussion/comment/20418777#Comment_20418777

That sounds like a fancy way to say that the Tax Planner "interesting to look at", which may or may not reflect your real tax situation and is by no means the official source.

Here is how I see it.

All of Quicken's data, with the exception of data that has no other source, like maybe some charity donations or business expenses, is only useful as "double check". This concept that you will import data from Quicken to your tax program is way out of date and wasn't very good in the first place.

Let me give you a simple example that caused me to stop exporting anything other than my security sells (which I don't do any more either because I now do that directly from the financial institution). Back then I had interest in more than one savings account/financial institution. You need to separate out this by financial institution. If you look at the export/import it isn't obvious of how that would work but playing around with it, I found that the "payee" of the interest transaction was used. So, I tried having that in Quicken. Ran into a problem that the interest payments basically had the same payee, and with Quicken global only matching to renaming rules/memorized payees the only way to do this was to manually enter the interest payments all the time. Anyways I was finding myself tweaking what was in Quicken importing that into TurboTax and then finding some a bit off and doing it all again. What was a couple of numbers to enter took tons of time.

I'm always amazed by the people that come in here usually just before taxes are due, and want to import the whole year of transactions, like Quicken's automatic categorization is that good, not to mention the exporting/importing for what is much better done just in the tax program itself.

Other than the Tax Planner quirks/bugs to me the real problems are mostly "outside of the Tax Planner". That is my way to say that I think the calculations are right for what it gets, but in some cases the right entry isn't there, but in others the data that it is feed is wrong. One that stands out to me is the fact that the paycheck reminder has not end date. That means any teacher or other person that doesn't get a paycheck for the full year, that uses the paycheck reminder is going to get the wrong information in the Tax Planner.

Personally, what I do for tax planning is just make a copy of my tax data file and put in numbers for next year. Yes, it is using the last year's tax brackets and such, but it is more complete, and since it starts with exactly what I did for the last year I find it to be a good estimate.

mshiggins · February 20

@Ps56k2 I am having a hard time understanding if your Tax Planner inaccuracy issues are related capital gain distributions or capital gains. You seem to be using the two terms interchangeably and they are two separate and distinct event types.

Ps56k2 · February 20

sorry - it's a LT Cap Gain "re-investment" ?
hard to think of another word for "distribution" of funds….
I'll look around to see how these are accounted -

and from the Reports - Tax - Schedule D -

Randy 415 · February 21

For Tax Reporting, I just import my investment tax data from the FI's directly, as that is what is being reported to the IRS, not some Quicken estimate.

As for end-of-year tax planning (done in December), I use a series of custom reports from Quicken, import into a spreadsheet, run calcs, and get an estimate. I also use the FI's estimates. I find that the Quicken Tax Planner is not robust or accurate for my complicated situation.

Recently, I have tried the TurboTax "What-If" forms, and that works fairly well, too.

Ps56k2 · February 21

yeah - the gospel is the actual 1099 - I even double check the Turbotax FI imported data against the 1099 -

For planning - I have used the Tax Planner and made some adjustments like I mentioned,
until actual end of year for the final ES-1040 payment in January -

TurboTax - What IF - will have to look around the TTAX menu -
ahhh - tnx @volvogirl

https://ttlc.intuit.com/community/after-you-file/discussion/re-i-want-to-try-what-if-scenarios-on-my-2021-taxes-tt-dsktop-filed-and-accepted-by-irs-how-do-i/01/2735619/highlight/true#M663748

Rocket J Squirrel · February 22

I could have saved a lot of time by paying more attention to Tax Planner.

I have always, forever, claimed itemized deductions - until the $10k cap of the SALT deduction. I lose tens of thousands in deductible expenses thanks to that cap.

I somehow failed to notice that Tax Planner was using the standard deduction and entered my itemizations into TurboTax anyway. That was a waste of time.

Rocket J Squirrel · February 22

@mshiggins

One of my goals with using Quicken is to have accurate estimates for my taxes so I don’t have to wait for 1099s or TurboTax.

How can you do that with outdated QW2017? Did you find a way to override the old tax rates?

Chris_QPW · February 22

https://community.quicken.com/discussion/comment/20419488#Comment_20419488

Change from "Projected" to one of the numbered scenarios, and then select Rates.

mshiggins · February 22

@Rocket J Squirrel the Tax Planner has all the totals including reminders. So throughout the year, I can easily see YTD and estimated annual totals for my tax related income and expenses.

I get the tax rates from the IRS.gov and CAFTB sites.

Totals and tax rates get combined in my own home-grown Excel tax spreadsheet.

Rocket J Squirrel · February 23

https://community.quicken.com/discussion/comment/20419527#Comment_20419527

That never occurred to me. In fact, I really never understood the utility of the other scenarios. Thanks for the tip.

Tax Planner vs TurboTax - Divs & Cap Gains - vs 1099 & Tax Due

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