correct way to auto record gross salary deductions, and Quicken tax features

Adience · September 8

I've been using Quicken Classic Windows for a couple years and so the only thing I am doing with respect of my W2 based employment salary is recording the net pay pulled from my checking account.

Also I've never used any tax related features but feel like I want to explore. This makes me feel like I need to also properly record my gross income and all deductions.

my questions are:

is there a way to import my ADP pay slips so all categorizes are populated automatically?
what benefits does this provide or what features these additional info will enable, if any (other than having the statistics)?
What tax features in Quicken should I be utilizing? (I only have employment income and investments, no small businesses).

thanks

Jim_Harman · September 8

No, you can't import your paycheck details, but you can use Quicken's Paycheck Wizard to record your gross pay and deductions. To set this up, go to Planning > Tax Center and click on Add paycheck.
The Paycheck Wizard will set up a Reminder for your paychecks that records tax withholding, transfers for 401(k) contributions including an employer match, and other pre- and post-tax withholding. The net pay is deposited to your checking account. These feed Quicken's Projected Balances, Tax reports, and the Tax Planner.
In theory you can export the Tax reports to TurboTax, but I prefer to enter the numbers manually and use the reports to confirm the data on the 1099s I receive.
I have Reminders set up for all my regular income and expenses and use them to make sure that I haven't forgotten any bills and to project balances for the next 90 days.
The Tax Planner can be quirky to set up, but I find it useful to make sure my withholding and estimated tax payments are on track.

BK · September 8

Hello @Adience

This is a very good discussion.

1.There is no integration between Quicken and ADP's payroll processing to download your paycheck data from them. If you do a search here for "ADP", you will find similar inquiries. So your best option is using Quicken's paycheck wizard to make use of scheduled paycheck reminder.

2. Using the Net Pay as you are currently doing is the most simplified method. However, using the gross pay minus the deductions will give you the ability to allocate your paycheck pre/post tax contributions to your 401(k) or SimpleIRA for example, if you have them. Therefore you will see the statistics as you mentioned along with your year end tax liability and projections. Naturally all that information is not for everyone but I think many Quicken users like to know. If you find that data useful to you, then it is worth the extra few minutes of data entry every two weeks in my opinion.

3. I don't use many of Quicken's features, however it is scary how close Quicken calculates my year end tax liability/refund compared to the tax program I use - because all my income and tax data are in Quicken (after entering some of the tax credits that I anticipate). This allows me to better plan financially and know sooner than later if I should consider a Roth conversion for example or sell/keep an investment. Which brings me to two features I find helpful: The Tax Planner and the Lifetime Planner - both are found under the Planning tab. Not tax related but I also find bill and income reminders useful.

Adience · September 8

thank you both @Jim_Harman and @BK

You both mention using the "bills & income" reminders, which I also do. But because 100% of my bills are paid by the billers charging my credit cards directly, the only "bills" I have to pay are my credit cards and rent.

so instead of setting up each biller, what I did was, a few years ago, I come up with an estimated fixed monthly spend amount based on historical averages (surprisingly this number hasn't really changed in years). then I created a Reminder for 50% of that amount that's taken out every 2 weeks. This way my projected cash flow for the next 90 days or 1 year will consistently take into account my relatively stable fixed living expenses. Lastly, when it's close the next "expense day", just "skip" this bill so it doesn't create an entry in my register because things have been added to my credit cards.

do you see any flaw in this approach?

I will give the Paycheck Planner a try. If it can help me make sure I stay on top of my tax liabilities. When the SALT tax change in 2018 during Trump's first term, I got a surprised big tax bill when I filed the next year.. also sometimes if I sell investments in my taxable accounts I never know if and how much I need to send to the IRS to not incur penalty.

@BK how does that help you make roth conversion decision?

Adience · September 8

is there a quick way for me to retroactively add all my gross paychecks plus all deductions from 2025 calendar year that I didn't do this year?

Jim_Harman · September 8

If you set up the Paycheck to start on the first payday of 2025, it will create the appropriate number of overdue Reminders. All you need to do is visit each one, make any needed adjustments, and accept it.

To prevent double counting, don't forget to delete your existing net pay deposits and contributions to retirement accounts.

Be sure to back up your data file before setting up the paycheck reminder, in case something goes wrong and you want to start over.

BK · September 9

@BK how does that help you make roth conversion decision?

Let's make up an example where I want to buy an EV today and take advantage of the $7,500 federal Clean Vehicle Tax Credit that is ending soon.

This particular credit is a 'nonrefundable' tax credit. Meaning it can lower the amount of tax I owe, but I won't get a refund for any amount of the credit that exceeds my tax bill. In other words if I owe $5,000 to Fed, I will get $5,000 credit and miss out on the $2,500. If my tax bill is zero, I will not get any of that credit.

So my objective in this made up example is to owe IRS $7,500 (before the credit) when I do my 2025 tax return next year.

Let's say Quicken shows that I will owe approx $3K in Fed tax. So what I'll do is immediately change the Fed withholding thru my employer to zero, meaning from this point on my paycheck becomes bigger because I am no longer paying any Fed tax. I recalculate my estimated tax liability based on this change and find out that now I will owe approx $5K in Fed tax. That's better but still leaving behind $2,500 of free money on the table. This creates the perfect opportunity for me to generate additional taxable income that would result in additional $2,500 tax liability - by selling some taxable investments and/or making a Roth conversion. Obviously I over-simplified this as there are other things to consider but I hope that makes sense; and this is not a tax advice.

So how do I do all these calculations and projections? If I am confident that the data in my Quicken is complete and I have setup the tax planner to also account for other credits I may qualify for, that is a start. I will also use a tax program and/or seek help from a professional.

Adience · September 9

https://community.quicken.com/discussion/comment/20508568#Comment_20508568

oh that's quite clever. cool thanks.

by the way I know this is not the Mac section, but do Mac version not have all the cool tax features?

BK · September 9

I don't know that at all. I suggest you post your question to the Mac.

correct way to auto record gross salary deductions, and Quicken tax features

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