How classify interest income into Fed taxable and state taxable
For a portfolio that has: US Treasuries, State Muni bonds, Out-of-state Muni bonds, corp bonds, stocks and REITs, I need a way to classify interest income in two categories: Fed taxable , and state taxable. And to make this effort less tedious the categorization should done when downloading the interest income for each holding. Is possible to classify interest income into these two categories? It sure would help from tax planning perspective.
Answers
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If I'm remembering correctly:
UST would be Fed taxable, but not State (in most states)
State Muni isn't Fed taxable (usually), but not state taxable
O-O-S Muni & Corp bonds are Fed & state taxable (usually)So, the only way that I can envision this happening is if you ignore the interest downloaded and then record transactions, with categories you've created, to record the interest received using those categories. Which sounds more tedious to me.
That's because your brokerage probably doesn't do the split that you request themselves. And, frankly, I wouldn't trust Q to make the determinations that would be needed for this.
Q user since February, 1990. DOS Version 4
Now running Quicken Windows Subscription, Business & Personal
Retired "Certified Information Systems Auditor" & Bank Audit VP0 -
Quicken can manage the federal tax status of securities pretty well. But Quicken was never designed to manage/track state and local tax status of just about anything (other than how it might factor into federal tax planning). So, I agree with @NotACPA that if you want to track and manage state taxes on investments in Quicken you will need to do that manually which, as you noted, can be quite tedious.
The only other option I can think of is to subscribe to or buy a software dedicated to investments management that can provide the level of tax reporting and planning detail that you want/need.
Quicken Classic Premier (US) Subscription: R66.23 on Windows 11 Home
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Thanks for your comments.
Perhaps you can suggest software dedicated to investments management that can provide the level of tax reporting and planning detail.
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Sorry, but I don't use nor have I researched any such tools. Maybe someone else might pipe in here and offer some suggestions. Google searches should be able to identify multiple options. Perhaps an active trading platform might be best suited for this. Or maybe you can talk with someone at the brokerage where you are invested for suggestions.
One last comment: I'm assuming you are talking about taxable investment accounts. If you are talking about tax exempt or tax deferred accounts, then this effort should be dropped because there is no advantage to keeping tax advantaged investments in them. In addition, tax advantaged investments tend to have lower returns than taxable investments.
Quicken Classic Premier (US) Subscription: R66.23 on Windows 11 Home
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