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Author: shess Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Prior year tax payments in Quicken Date: 9/14/1998 2:44 PM
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About 1/3 of the taxes we've paid in 1998 went with our 1040 in April. Now, the Quicken tax report shows this huge amount paid in taxes, which is really not quite right.

I suspect it's a problem with how the payments are categorized - right now, they're just Tax:Fed, etc. Clearly if I recategorize them, they wouldn't show up on the tax reports. But how will any add-on tax package find them then?

Even then, recategorizing the payments still lets Quicken include them in graphs such as YTD Expense Comparison. Is there any way I can indicate that a payment is for the prior year?

I'm considering adding a new account, to which I can transfer the funds on 12/31 of the appropriate tax year. Then I should be able to run reports against the remaining accounts and see the funds creditted as of the year they were paid for. Does this make sense, or is it a hairy hack?

Thanks,
scott
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5347 of 121219
Subject: Re: Prior year tax payments in Quicken Date: 9/14/1998 9:35 PM
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[[About 1/3 of the taxes we've paid in 1998 went with our 1040 in April. Now, the Quicken tax
report shows this huge amount paid in taxes, which is really not quite right.

I suspect it's a problem with how the payments are categorized - right now, they're just Tax:Fed,
etc. Clearly if I recategorize them, they wouldn't show up on the tax reports. But how will any
add-on tax package find them then?]]

Sorry, Scott...but I'm just not a Quicken expert. So I really don't have any useful information for you.

Perhaps some other technical Fool will be able to provide you with some information.

All that I can really suggest, in the future, that you maintain separate federal and state tax accounts. The state account would be very important, since the state taxes you pay may be a deduction on your federal tax return (if you itemize your deductions).

The federal taxes are much less important, since they are not a deduction anywhere.

TMF Taxes
Roy

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Author: doubtit Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5357 of 121219
Subject: Re: Prior year tax payments in Quicken Date: 9/15/1998 8:15 PM
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Set up a liability account - Fed Income Taxes Payable

Make an entry increasing the account by your payment for taxes for 1997 made in 1998 - use the Taxes:fed expense account. When you make the palments in 1998 charge them to the liabilty account - if you entered the transactions correctly - your Fed Income Taxes Payable account will = 0.

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Author: shess Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5395 of 121219
Subject: Re: Prior year tax payments in Quicken Date: 9/19/1998 1:02 AM
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doubtit writes:
<<Set up a liability account - Fed Income Taxes Payable>>

That _exactly_ accomplished what I needed. I actually just called it "Tax Liabilities", and threw both the state and federal liabilities in there. Now I show huge expenses in December of the prior year, but at least they're _for_ that year...

Thanks much,
scott


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Author: shess Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 5408 of 121219
Subject: Re: Prior year tax payments in Quicken Date: 9/21/1998 1:59 AM
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doubtit wrote:
<<Make an entry increasing the account by your payment for taxes for 1997 made in 1998 - use the Taxes:fed expense account. When you make the payments in 1998 charge them to the liabilty account>>

OK, I've used this, and it works, it makes sense, and I even understand why my first try at this (with a non-liability account) didn't work. I'm still considering whether to distribute the April 15 payments across the earlier year, but that's a different problem.

So, onto a related problem - accounting for IRA contributions in Quicken. Again, I'd like to account for the IRA contributions in the tax year they were made _for_, rather than the year they were made _in_. Using an "IRA Liability" account would work for balancing where things are coming _from_ - but how do I then balance where things are going _to_?

The best alternative I've thought of thus far is to have an "IRA Liability" account along with an "IRA Precontribute" account, with the contributed amount entered as of 12/31 of the tax year. Then, I pay towards the contributed amount on 4/15 (or whenever) and transfer from the "IRA Precontribute" account to the real account on the same day. This is getting weird, though...

The easiest solution would be to just make all IRA contributions in the tax year in question. Since I'm a self-employed consultant with fairly variable income, the likelihood of _that_ solution working is nil.

Thanks,
scott


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