Accounting for IRA withdrawal in Quicken 2014

[jo]

First year for Ira withdrawal. Had Fed and State taxes withheld. I had cash in the Ira to cover it and received a check from my broker for the net amount. From reading various solutions online, I understand that the underlying approach is a split transaction in the receiving account but didn't grasp everything I read.

I've entered the transaction as a transfer of the gross amount from the Ira account to a pseudo account I use for holding undeposited checks. I've split the receiving transaction so that the taxes show up in the proper [asset] categories and the sum of the taxes offsets the transferred amount to leave the exact amount of the check I received in this holding account. The only part missing is how to get the gross amount to show up into an income category- Ira distribution, miscellaneous, ANYTHING!

i'M sure this is simple, but I'm just not looking at it correctly. Could use some help. It seems like I need to be able to assign a category to that transfered amount, but obviously I can't do that directly. RC?? John?? Anyone?

[John Pollard]

"jo" wrote

The only part missing is how to get the gross amount to show up into an
income category- Ira distribution, miscellaneous, ANYTHING!

----------------------------------------------------

Are you sure you need the gross amount to show up in a "category"? Or do you
just need it to show up in a Tax Line Item?

You can assign Tax Line Items to "transfers" (FROM or TO any account). See
the "Tax Schedule" button on the General tab of the Edit Account Details
dialog for the account.

You can also assign a tax line item to a specific transaction: right-click
the transaction and select the "Tax Line Item Assignments" choice (also
available for specific line items in a split transaction).

[jo]

I would like the gross amount to show up in an income category because it *is* income to me this year and to have it omitted from my P/L report is misleading without it. I do have the Tax Line Assignments set appropriately and the report is correct. I seem to need just one extra trick to get this income stream reflected where I want it.

[John Pollard]

"jo" wrote

"I would like the gross amount to show up in an income category because it
*is* income to me this year and to have it omitted from my P/L report is
misleading without it".

---------------------------------------------------------------------------

Wasn't it income back when you earned it ... before you contributed the
income to your IRA? If you treated it as income back then, wouldn't you be
double-counting it if you called it income a second time, now?

In any event, every category in Quicken has either an income or expense
"characteristic", even transfer categories.

The Income and Expense by Category report defaults to displaying all but
"Internal" transfers - so you should see your IRA withdrawal in that report
without any need for customization.

The Profit and Loss Statement, on the other hand, defaults to excluding all
transfers. If you Customize the P&L report and tell it to include all
transfers, you should see your IRA withdrawal transaction(s) reflected in
the report. You may need to tweak the Category selections to exclude the
"withdrawal" from the IRA account ... leaving only the "deposit" (in the
category, "FROM Ira Account") into the checking? account.

[Ken]

OK. Calm down.

It's income, but, especially after the broker has taken taxes out, not
all of it may be _taxable_ income. Especially if you've done
non-deductable contributions over time.

You probably know all this, but let's hit it one piece at a time.

Let's suppose that you have performed nothing but deductable
contributions to your IRA over time. In addition, your IRA has been
earning money. In that case, the sum total cashed out (before taxes) is
income. Assuming that you're tracking both the IRA and your checking
account in Quicken, you hopefully have your IRA _marked_ as an IRA in
Quicken. (Look under account details on the IRA. Confirm that Quicken
thinks that the tax schedule for transfers out of the IRA are listed as
"1099-R: Total IRA taxable distrib.")

Next: In your checking account, do a deposit for the amount that the
broker sent your. However, in order to keep Quicken sane, do a split on
this transaction. In the split, first line, put down the gross amount
that was created in your IRA account before taxes. On the second line,
make the category for the negative amount shown as federal tax
witholding, just like your paycheck. (On mine, it's Tax:Fed).

Believe it or not, in the Quicken tax planner, the transfer from the IRA
to your checking account will show up as IRA income, and that income
will be the total amount, before taxes. The witholding will show up in
the correct place as money paid to the feds this year.

Where this nifty trick falls on its face is when you've made
non-deductable contributions to the IRA in past years. If you have, then
the non-deductable contributions have been taxed in the year that you
made them and the _proportion_ _of_ _the_ _distribution_ that is
attributable to those non-deductable contributions doesn't get taxed
when you take out the money.
Example: Suppose you put in $5,000 of deductable contributions; $2,000
of non-deductable contributions (total of $7,000). Then, a number of
years later after your investments have grown, your IRA is now worth
$10,000. (Growth of another $3,000). You now take out $2,500 as a
distribution.
Of that $2,500, $2,500*(5000+3000)/10000 = $2,000 is taxable income.
$2,500*(2000/10000)=$500 is not taxable income.

The feds have a nifty IRA distribution form that takes you through all
the math, handy especially when you have multiple IRAs all over and
distributions from different IRAs all over.

As far as I know, Quicken doesn't know how to handle the non taxable
portions of IRAs, so it counts it all as income.

KBeck.

[jo]

Thanks for trying to explain how to do this. Unfortunately it still isn't working, but I also varied the procedure a bit and that may be the cause. Here's the current situation.
1) I have what you described: a simple IRA with all of it tax deductible contributions earning income over the years. The IRA account is configured as you indicated.

2) My first transaction was not a Deposit,but a Transfer of the gross amount from the Ira account to my checking. That seemed like the logical way to mimic the actual event. However I cannot then split the Transfer; Quicken blocks me.

3) The closest I could come to getting anything correct was to Transfer each component of the total to my checking: the actual amount received, and the federal and state tax withheld. That accomplished reducing my Ira balance and assigning the withheld taxes to the correct categories, but I cannot find any place, either in the Tax Planner, or in my P/L that the gross amount shows up as income. I really want it to appear in that latter, along with all other income. Having it just in the TAx Planner wouldn't suffice, even if it did work.

What am I missing?

[Zaidy036]

Set up the split in the IRA before transfer and, yes, you will have to
start with the gross amount and deduct the other items to get to the net
because they are all being transferred.

--
Zaidy036

[Richard]

"jo" <philly...@verizon.net> wrote in message
news:abe22fd4-f4ec-4501...@googlegroups.com...

What you are missing is the fact that only the gain on the sale of your
funds is current year income. The original value of the funds sold are not
current year income. It should have been considered and shown as part of
your gross salary income in the year that you transfer the funds into the
IRA account. In other words, the portion of your salary transferred into
your IRA to buy funds was a payroll deduction, transfer to your IRA account,
the same as taxes or other payroll deductions, i.e. insurance. The gain
shows in your current year reports as 'RlzdGain'. If the original cost was
included in current year income, you would be 'double counting'. Once when
you earned the money that you transferred to the IRA account to buy the
funds and again when you withdraw the funds for the IRA account. Hope this
solves your problem. In summary, the original cost of the funds was income
in the year earned and transferred. The gain on the sale of the funds is
income in the year that you withdrew the funds.

Now, hopefully I don't have you completely confused.
--
Richard

[jo]

I am completely confused :( I can see this is likely going to be a tax nightmare. I thought this was simple because I fell into your first scenario: nothing but tax deductible contributions, which meant the gross withdrawal *was* income this year.

Whatever funds went into this Ira were made decades ago because I had to retire on disability back in the 1980s. I have absolutely no records of how anything was accounted for back then but vaguely remember that the company decided at year end how much they would put in your IRA account, based on your salary and how well they had done that year (could be a false memory); I don't remember what my W2s looked like at all but I wasn't contributing monthly, assuming I was contributing at all. I don't have my tax returns from back then either, of course, to see how I was reporting things either. If I was deducting the company contribution (and they were reporting it on a W2), are we back to the simple situation?

The company was bought out by another, and has recently changed hands again. I do know some of the people who worked with me back then may be able to get a little clarification on how things worked, but doubt that it will be enough. When I left the company, I rolled the account into another Ira at Fidelity and there were a few years where I was doing a little consulting and contributed a small amount to the account. I did deduct my contribution when I filed tax returns for those years.

Any gains tracked only go back to about 8 years ago, after I stopped contributing and just let my financial advisor adjust the mix of investments. There is a cost basis attached to the account,as of the date she inherited it from Fidelity, but I doubt that's helpful in determining what proportion of my current year's withdrawal is taxable to me. This is a mess and obviously not a Quicken problem.

[jo]

Ken,

I think we have made my situation overcomplicated, and my lack of memory or records has made it worse. The below came from website describing taxation of withdrawals:

Case 1 ) "No nondeductible contributions: Distributions out of the account after age 59½ are taxed as ordinary income. You don't have to calculate investment gains."

I doubt that I would have tossed all records if I had any inkling that I would have to do some special calculations when I finally made a withdrawal; I tend to keep everything. I suspect that all the company contributions were deductible in the year made, and were reported as such in my tax returns. Certainly all my contributions after leaving the company were in this category. So it isn't double taxation, and we can go back to trying to figure out how to enter this in Quicken if you agree :) (I'm still going to ask my old associates for details)

jo

[Richard]

"jo" <philly...@verizon.net> wrote in message

news:a8f450e6-5b0e-4873...@googlegroups.com...

Jo,

Relax, relax, relax, breathe, breathe, breathe. Not necessary to worry,
because as described below, you really don't have a problem. Your just
confused about financial income vs. taxable income.

Based on all of your posts, I'm going to make a few assumptions:

1. Your prior years' tax returns were properly prepared either by you or a
competent tax accountant.
2. You do not have the IRS chasing you.
3. You have little accounting or tax knowledge.
3. You are confusing income for financial accounting (Income and Expense
Report in Quicken) with taxable income. These are two completely different
animals.

Now, based on the above, this year you will be taxed on 100% of your IRA
distribution. A regular IRA, not a Roth IRA, always have 100% of the
distribution taxed in the year of withdrawal. You don't need to worry about
any cost basis versus investment earnings for tax purposes. The company
managing your IRA will provide all of the necessary tax documents by the end
of January. Your 2014 tax preparation should not be a problem.

The cost basis is only necessary when selling stock from a brokerage
account. It may also be necessary for Roth IRA's, but since I don't have
one, I'm not sure. To spare anymore confusion, I won't go into an
explanation regarding brokerage or Roth IRA accounts since it isn't part of
you current concern.

From a financial accounting perspective, the only income this year is the
interest or dividends earned this year and any increase in market value
(RlzdGain) on the funds sold to generate the cash distributed.. That's what
will show on a Quicken Income and Expense Report. Remember, the amounts
transferred into you IRA and the interest and dividends from prior years was
reported as income in the year earned.

From a taxable income perspective, you pay tax on 100% of the distribution
because neither the amount you contributed to the IRA nor the interest or
dividends earned were ever taxed. Since 100% is taxed there is no need to
know how much is your original contribution or how much you earned on it or
how much the market value increased. 100% is 100%.

If you have properly entered, into Quicken your contributions, rollovers,
mutual fund purchases, interest and dividends earned and sales and
distributions, you Quicken reports will be properly stated. If not, I can't
help you, nor do I think anyone else can, since you don't have the records.

A point of curiosity. How many years of data do you have in your Quicken
file?

I don't know if I can be of any further help. While I'm a retired Corporate
Accountant, I an not, nor have I ever been a Tax Accountant. I know enough
to accurately prepare my personal tax returns. I purposely stay away from
doing taxes for others because I don't enjoy it nor do I want the
responsibility. I do believe that I understand Quicken and I am comfortable
using the 'interview process' in TurboTax. Maybe R.C. White will jump into
this discussion. He's a retired Public Accountant and has more experience in
this area then I do.

[Ken]

Jo,

Sorry I wasn't on to reply over the last few days; busy with work.

Hokay, it's like this.
The money in your IRA is in the following buckets, with the IRA's take
on this:
1. Bucket #1: Money that you put into the IRA in a particular year and
that you _deducted_ on your federal return the year you did that. That's
a "deductable" IRA contribution.
a. Did you pay tax on that money the year you put it into the IRA?
Answer: No. That's the definition of a deductible contribution, you
deducted the income from your tax return _in_ _that_ _year_. An example:
if you put $2000 into your IRA in 1993 and you deducted that from your
taxes in that year, that meant you took your gross income for that year,
knocked off $2000 for the deductible IRA contribution, and the Feds
didn't tax the contribution.
b. When you take that money _out_, later, the Feds want their slice
of it, using the tax rates present during the year you took it out.
(Note: _not_ the tax rates when you put it _in_. That's usually a Good
Thing, since one typically has less income and lower tax rates after one
retires as compared to before.)

2. Bucket #2: Money that you put into the IRA in a particular year and
that you did _not_ deduct from your income in the year that you did
that. This is the definition of a "non-deductible contribution". Yes,
one can do that; heck, I do that. Sometimes it's been when the income
limits in a particular year are such that one _cannot_ make a deductible
contribution (one makes over "yea", whatever "yea" is: Then the IRS
says, "no cookie (deductible contribution) for you!".
a. Did you pay tax on that money in the year you put it into the IRA?
Answer: Yes. You couldn't deduct the IRA contribution from your gross
income. An example: You put in $2000, the IRS said you couldn't deduct
it, so you didn't.
b. When you take that money out later, the IRS says, "You already paid
taxes on that money. We're not taking a second bite of the apple, you
don't have to pay taxes on it again! So don't."

3. Bucket #3: You've got money in your IRA and it's been in there. Value
of the account has gone up over time: Dividends, reinvested Capital
Gains, and (if you're in mutual funds/stocks/bonds etc.) when you sell
those financial instruments, you get more than you paid for them. (Yeah,
capital gains, no kidding.) A simple way to think of it: Whatever's in
that account that's not from Bucket #1 or Bucket #2 is Bucket #3. And,
yes, it is possible that bucket #3 might be _negative_, one can have
capital losses, too.
a) Did you pay any taxes on that increase in value? Answer: No. This is
one of the major reasons that people like to invest in IRAs, even if the
contribution is non-deductible: They grow tax-free.
b) When you take that money out later, the IRS says, "You haven't paid
taxes on that stuff, reinvested dividends/capital gains or just straight
capital gains/losses. You sure as heck are going to be paying taxes on
it now!"

Just to be clear about Bucket #2: Suppose that the limit of a deductible
contribution in a given year is some amount, and you put in more than
that. The amount below the limit is deductible and is going to be taxed
when you take it out; the amount above that limit is non-deductible and
you won't be paying taxes on it when you take it out. Example: Suppose
that in 1995 the limit is $5000. (I don't remember what it was, one can
look it up.) You put in $7000: Then, that year, you get a $5000
deduction on your taxes and 1) a $5000 deductible contribution and 2) a
$2000 non-deductible contribution into your IRA.

At the end of any given year before you start taking money out, the
amounts in Buckets #1 and #2 are fixed and are a sum of the amounts you
put in Buckets #1 and #2 in previous years. The amount in Bucket #3
depends upon how well your investments are doing. At the end of any
given year, the sum of Buckets 1, 2, and 3 _is_ the year-end value of
your IRA. Period.

Now comes the time when you take money out. Bucket #1 is taxable; Bucket
#3 is taxable; and Bucket #2 is _not_ taxable. Like I said above, the
IRS/Congress doesn't want to double dip.

Reporting. If you have an IRA and you've made non-Deductible
contributions, ever, you're _supposed_ to file Form 8606, Nondedutible
IRAs (Contributions, Distributions, and Basis). Chase on over to the IRS
web site and download a copy. Now. I'll wait.

This form does two things:
1. It works out for you what's in Buckets 1, 2, and 3. It's a running
total thing: On line 2, it wants the amounts from previous years, fun.
2. If you had a distribution, based upon what was in Buckets 1, 2, and 3
at the beginning of the year, it figures out how much of that was
taxable (the proportion that was in Buckets 1 and 3) and how much was
not taxable (the proportion that was in Bucket 2). It then has you stick
the appropriate values into the right places in the 1040 forms.

If you've never had a Bucket 2, non-deductible contribution then it's
simple: You don't have to file 8606 and do the math, everything you got
out of your IRA is straight income since it was never taxed before. Full
stop, go on with your life.
If you have had a Bucket #2 situation, then you slap your forehead (like
I did once), go back through your records, find copies of 8606 from the
IRS web site going back 'way too many years, fill out all those forms
starting in the year you made your first non-deductible contribution,
and fill out the forms right on through to the present year. The last
one (using the data from all the previous 8606's) will have the
appropriate basis (what the IRS calls it) and the correct bucket data.
You'll also put in what you had for your distribution this year and
it'll figure out how much income is taxable or non-taxable.

Hope this helps.

KBeck.

[jo]

Richard,

I am not hysterical about this at all, just would like to be able to enter the damn transaction in Quicken so that the withdrawal, withholdings and residual amount all appear in categories/accounts/reports where I want them to.

In your list of assumptions, I would agree with 1 and 2. As for your first 3) I have rather a lot of experience with taxes, having done my own for decades, and helped others to do theirs. I have enough experience with accounting to deal with most situations, but do get confused by some of conceptual distinctions.

While I have confirmed that the RMD is completely taxable, I still don't know how to enter it in Quicken. While you maintain that it is not income from a financial accounting perspective, it is income from a taxation perspective and I would like it to show up in my personal P & L report in an income category with all my other taxable income. Are you saying that is impossible or just an improper view of the definition of "income" means from a pure accounting perspective?

[jo]

Hi Ken,
I appreciate your patience. I have confirmed that I am entirely in the bucket 1 situation. My entire RMD is taxable. My only issue is how to enter this in Quicken to get *my* desired effect. If you read my answer to Richard, you may understand that I may be trying to do something that isn't possible because I want to classify the withdrawal as an income line item. I've played with various split approaches and categories, but nothing completely works. The closest I've come is to do a deposit to the bank account for the full amount, assigning that amount to an income category, and splitting out the withheld taxes to separate accounts to arrive at the amount actually deposited in the bank. The only problem is that since there is no source for the deposit, so the Ira account does not reflect any withdrawal.

jo

[Bartt]

OK, I think this is kind of bouncing all over the place and at the risk of adding yet another voice to the fray, it might be beneficial to specify exactly which Q report(s) you're running. I run Quicken H&B, but I don't use Quicken for my business books. I don't know the details of what the reports under the "Business" node include or exclude. I do know that if I run a Profit and Loss Statement report, it doesn't return any rows.

Also, as John Pollard mentioned on Nov 28, I suspect this will be best handle by assigning a Tax Schedule to the Tranfers In/Out of your IRA Account, if that isn't already done. To verify that, go into Account Edit mode, then click the Tax Schedule button along the bottom edge of the Account Details pop-up. From there, make sure the Transfers drop down has something like "1099-R: Total IRA gross distrib."

If you've done that, I'd next run a Tax Summary report under the Tax node.

For personal tax information, I generally stick with the Tax Summary or Tax Schedule report.

[Richard]

"jo" <philly...@verizon.net> wrote in message

news:e494524e-eccc-482b...@googlegroups.com...

Jo,

I'm glad to know that at least some of my assumptions were correct. To
answer your question, shown below,

"Are you saying that is impossible or just an improper view of the
definition of "income" means from a pure accounting perspective?"

YES, I'm saying that it is impossible and improper, if done correctly, to
have your RMD show as income in your personal P&L. It, along with any tax
withheld, WILL show in a Tax Summary report under the 1099-R section. This
section also includes any income you received from pension plans. Again, if
done correctly, these numbers should agree with any 1099-R tax documents
that you receive in January from your pension and IRA administrators.

I wish that 'Eternal September' allowed attachments. I would attach
screenshots from Quicken. However, since it does not. I going to upload some
to a website and then post back the links to the screenshots so that you can
visual see what I'm obviously not able to properly explain. Give me a day or
two to get this accomplished and then I'll post back with the appropriate
links. Hopefully these links will clarify the Quicken entry process required
to properly account for a 'traditional IRA" distribution.
--
Richard

[jo]

Richard,

You don't need to go to the trouble of posting screen shots. If it is impossible to get my personal P/L report to show the RMD as income, I'll have to live with that. I don't care that it is improper from some conceptual perspective to have it shown there, but so be it. I know it is on the Tax Schedule. I know how to get Quicken to account for the withdrawal and withholding. I just wanted what to me is logically income to show on one report. There are no other complicating considerations, and I have no doubt that the RMD will agree with my 1099R.

Thanks so much for sticking with this thread without becoming condescending. This often happens online when people are having difficulty pinpointing the source of their mental block to a procedure and others get frustrated and assume they are talking to a Quicken illiterate. I'm not, but that doesn't mean that I don't sometimes try to get it to do something that it is not designed to do.

Jo

[jo]

Hi Bart,

As you may see from my post to Richard, I am surrendering to wanting something that Quicken isn't designed to do. I also have H & B, but no longer use it for any business activity. I just use the Profit and Loss Report for all my personal income and expenses and wanted to view the RMD as income, which may violate some fundamental accounting rule. I don't depend on the Tax Schedule Report when doing my taxes and don't import from Quicken into TTax (what a mess it has made in the past!), but rather use my P/L as a snapshot of all my financial activities during the year. Since I have it set to display two years of data, I get a great comparision of my financial situation from the prior year to the current. I just can't come up with a trick to have my RMD listed as income on this report, but I know it is on the Tax Schedule.

Thanks, jo

[Richard]

"jo" <philly...@verizon.net> wrote in message

news:8947990c-2f60-46fe...@googlegroups.com...

Jo,

Thank you for kind response, much appreciated. I understand your comments
regarding 'mental blocks'. I have them too, but fortunately, not in this
particular situation. One of this days out of the blue, the light will go on
and you'll say to yourself 'Aw $%$@, why didn't I figure that out earlier.
:)

I'll take one last stab at trying to help 'turn on the light'.

Your contributions to the IRA were income in the year that you earned that
money that enabled you to make the contribution. An IRA is a 'TAX DEFERRED'
account, not a 'DEFERRED INCOME' account'.

In a very simplistic view, think about it as taking part of a current
paycheck and putting them into a regular savings account. Those earnings put
into savings were part of salary income in the year earned. All of the
salary shows as income in the P/L report in the year earned. All that was
done was to part of it into a checking account and some into a savings
account. Five years later, funds are withdrawn from the savings account and
placed into the checking account. This transfer does not show as income in
that year because it was five year old income. The same is true for an IRA.
You are just transferring money from one account to another.

The only difference between putting money into savings versus an IRA is that
income tax is paid on the savings upon deposit (i.e. earned), in the case of
the IRA, the income tax is paid upon withdrawal (deferred).

Good luck, I bet the light will go on either before or during the
preparation of your 2014 tax return.
--
Richard

[jo]

richard,

I think the light started to go on yesterday and was further brightened by your explanation. !

jo

[Richard]

"jo" <philly...@verizon.net> wrote in message

news:aaa1be91-8532-4d50...@googlegroups.com...

Jo,

GREAT!! Have a Merry Christmas and a Happy New Year.

[Ken]

On 12/9/2014 2:25 PM, jo wrote:

>
> Hi Ken,
> I appreciate your patience. I have confirmed that I am entirely in the bucket 1 situation. My entire RMD is taxable.
>
> My only issue is how to enter this in Quicken to get *my* desired effect.
> If you read my answer to Richard, you may understand that I may be trying to do something that isn't possible
> because I want to classify the withdrawal as an income line item.
> I've played with various split approaches and categories, but nothing completely works.
> The closest I've come is to do a deposit to the bank account for the full amount,
> assigning that amount to an income category, and splitting out the withheld taxes
> to separate accounts to arrive at the amount actually deposited in the bank.
> The only problem is that since there is no source for the deposit, so the Ira account does not reflect any withdrawal.
>
> jo
>

Back again. And I realize that you've more or less had the light dawn.
But Quicken really _does_ handle this correctly. With one snivvy that
might not be clear.
As it happens my wife has an inherited IRA with an RMD that we've been
getting for the past few years.
So, once a month, Ye Financial Institution cashes out a certain number
of shares of a mutual fund, in the value of the monthly RMD.

So far, so good. That's what they're supposed to do. Here's where it
gets tricky.

In their statements, and what gets downloaded into Quicken, they deduct
the Federal Taxes at a rate that we specified. (I'll come back to that
after we get through the tricky part.)

Next, in their statements, they then transfer what remains into a
taxable account with that same financial institution. For tax purposes,
it would be the same as if they cut me or my wife a check and sent it to us.

So, just playing math, Cash_Received = (RMD - TAX_WITHELD).

Now, how does Quicken handle this?

First, Quicken knows that distributions from IRAs are special. In
Quicken, go to Tools->Account List, then click the Edit button for the
IRA account. You'll see little check boxes about tax deferred and such.
At the bottom of the Account Details screen you'll see a button for Tax
Schedules. Click on that.

You'll see, or you should see, that Transfers Out are associated with
1099-R Total IRA taxable distrib. As it should be. Sort of.

So, in Quicken, when you transfer money out of the account, in the Tax
Planner this shows up as income. On my 2015 Quicken, this is under
Planning, Tax Center button, then Show Tax Planner. In the Tax Planner
the IRA income shows up in Other Income as Taxable IRA/Pension
Distributions. Yes, you _will_ be getting a 1099-R this coming year from
your financial institution. And the money ends up in Line 15B of the
full 1040 form, or at least it did last year.

Now we get to the tricky part where Quicken misses the boat. Suppose
that your total RMD in 2014 is $5000 and the financial institution
nabbed $1000 of that and sent it to the Feds, then sent you a check for
$4000.
Quicken sees _only_ that you got a transfer out of the account in the
amount of $4000. And, for tax purposes, it rather ignores the fact that
you paid $1000 in federal tax withholding, probably because it has the
account type marked as a tax-free type of account. Oops. So it shows (or
at least, in the versions of Quicken before 2015 it shows) your taxable
income from the distribution as $4000 and it ignores the fact that you
paid $1000 in taxes to the Fed. Oops again.

How to fix: Quicken kung-fu.
1. Download ye transactions from the financial guys. You'll typically
have three of them:
a) Them selling off some security or other for the appropriate RMD
amount. (The $5000).
b) Them taking out the taxes. (Tax:Fed). ($1000 in Federal Tax
Withholding.)
c) A transfer to a taxable account. (the $4000 you get.)
2. Note that in your taxable account you have a deposit of $4000,
following my example here.
3. Kung-Fu step #1: Write down the amount in 1b, then delete that
transaction. (The $1000 goes away).
4. Kung-Fu step #2: Change the transfer out of the account in 1c to the
full RMD value. ($5000)
5. Kung-Fu step #3: Change the transfer into the taxable account into a
split transaction.
a) First split item: $5000 from the IRA.
b) Second split item: -$1000 as a withholding to the Feds.
(Tax:Fed). You remembered to write down the amount before you deleted
it, right? :)

Results of the Kung-fu:
1. Quicken sees a $5000 transfer out of the account. That's the correct,
taxable amount as far as it's concerned and the money goes into the
correct places in the tax planner, including as a full $5000 income IRA
distribution. Yea!
2. Quicken sees a $1000 payment to the Feds. This also shows up in the
tax planner because it happened in a taxable account, and it shows up in
the right place, too, as Tax Withholding. Assuming that you got the
correct category in the split.
3. You end up with $4000 in your taxable account, which, frankly, is the
amount of the check they sent you.
4. If you run a Reports->Tax->Tax Schedule or Tax Summary, the numbers
come out correctly.

So, yeah, by default Quicken doesn't get it Quite Right, but a little
Kung Fu fixes that.

Hope that helps.

KBeck

[Bartt]

or, you can try a slightly different method of modeling tax withholdings if you make quarterly payments:

https://groups.google.com/forum/?hl=en#!topic/alt.comp.software.financial.quicken/07lprIMS3Qc

In which case, you'd just book that downloaded $1,000 transfer out of your IRA straight to the Q account that holds your quarterly payments & the Tax Schedule setting on the IRA account would work for the w/held amount.