Pre-Tax versus After-Tax Moneys

mfelmlee · September 25

Someone asked me how much money I have that is pre-tax versus after-tax. I thought Quicken deluxe could tell me that easily. Well, I can't figure it out. I have all kinds of investment accounts through institutions like: brokerage accounts, IRA 401k's, Roth IRA's. And I also have off-line accounts where I invested moneys into funds that come from self-directed IRA's and ROTH IRA's and CASH. "Tax deferred Yes or No" is the only common selection in Account Details that I can find that I think could be used to distinguish between after-tax moneys. I tried to create a report where I could use Tax deferred to show balances between Yes or No. I don't see it. I would need to generate two reports by manually selecting which accounts are Yes or No.

NotACPA · September 25

Well, my first thought is that if funds are in a tax-deferred, or no-tax, account then they aren't "after-tax".

They probably will be at some future date, but since they aren't after-tax yet, since no tax has been paid on them, then there's no way for Q to calculate what you're asking. Your marginal tax rate, and even the tax rates themselves, could well change in the future.

SO, I'd suggest that you export the information to a spreadsheet and explore there.

mfelmlee · September 25

Hello, my question may have gotten too deep in the weeds.

Is there a way in quicken to separate traditional IRA and Roth IRA?

I guess a spreadsheet is easy to do that. I was thinking the tax differed check box could be used for that. 401k moneys are tax differed but ROTH IRA's along with their gains are tax free.

mshiggins · September 25

Another way to differentiate investment accounts by their tax category is to use Portfolio views for each tax category. Then select the accounts relevant for that tax category to display in that view.

Chris_QPW · September 25

https://community.quicken.com/discussion/comment/20511722#Comment_20511722

The "Tax deferred" is bit misleading since it was created before Roth IRAs existed.

Both Traditional IRAs and Roth IRAs should have that set to Tax deferred. What it means in Quicken is that this isn't a "taxable" account like a normal brokerage account.

It is the account type that determines how Quicken treats it, and I'm thinking about the only place where it treats the two different is in the Lifetime Planner and maybe the Tax Planner.

As I see it, the question being asked is the same one would have if they were going to try to calculate out RMDs. For the RMD calculation you would need to know the value of all your Traditional IRAs and 401Ks (if not still working for that company), …

Personally, my account names are like Chris' IRA XXXXX, and Chris' Roth IRA XXXX, and as such I can easily separate them out by their account names. But as you have noted @mfelmlee you would have to make two separate reports, Quicken isn't going to allow you to separate them out by account types.

q_lurker · September 29

In my world, Roth IRA account balances are the only after-tax money. It is possible that your IRA have a basis value from you having made taxable contributions to them. That portion of the account would be considered after tax.

The question might also have been focused on the cost basis of your investment accounts (an after tax amount) versus the capital gains portion (a pre-tax amount). So a better definition of the two terms would help us answer your question. With this consideration of pre-tax / after-tax, I think the portfolio view showing both cost basis and capital gains of those investment accounts would be most useful. But I think to get the pre-tax valuation, you would still be adding the full value of the traditional IRA accounts to the capital gains total of the brokerage investment accounts.

Pre-Tax versus After-Tax Moneys

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