locked
Retirement Account Withdrawals and Taxes RRS feed

  • Question

  • I have been using Microsoft Money for over 18 years and am now approaching retirement. I have both 401K and Roth retirement accounts setup and I'm wondering how to properly record withdrawals so that the tax implications are properly reflected in Money.  As an experiment, I tried entering a simple transfer from the cash portion of both the Roth and 401K.........neither instance created a taxable transaction in Money. This should be fine for the Roth, but the 401K is all pre-tax contributions.  So what do I need to do.... do I need to record withdrawals and then separate deposit/income transactions???...or...?

    • Edited by sww1 Sunday, December 7, 2014 7:58 PM
    Sunday, December 7, 2014 7:54 PM

Answers

  • «So what do I need to do.... do I need to record withdrawals and then separate deposit/income transactions???»

    Exactly.  A sale from your 401 (k) account with the Transfer to field left blank and a separate deposit in your checking with the Category:   Retirement Income: IRA distributions.

    • Marked as answer by sww1 Friday, December 12, 2014 3:28 AM
    Monday, December 8, 2014 5:19 PM

All replies

  • If you are at least 59-1/2 and the Roth account is at least 5 years old, those distributions have not tax implications.

    Since the 401(k) is all pre-tax, the entire distribution is taxable.

    What other tax implication are you expecting Money to reflect?  What version of Money are you using?  Does your 401(k) account reflect that the contributions have been invested or is everything allocated to the accompanying cash account?

    Monday, December 8, 2014 2:05 AM
  • I'm using Money Sunset (version 17.0.120.3817).  The issue is that the withdrawals from the 401K (into which the deposits were made pre-tax) should be reflected as taxable income in the Tax Estimator and the other tax reports, but they're not.  Can someone explain how to record these withdrawals so that they trigger the appropriate tax implications?  Thanx.



    • Edited by sww1 Monday, December 8, 2014 5:10 AM
    Monday, December 8, 2014 5:07 AM
  • «So what do I need to do.... do I need to record withdrawals and then separate deposit/income transactions???»

    Exactly.  A sale from your 401 (k) account with the Transfer to field left blank and a separate deposit in your checking with the Category:   Retirement Income: IRA distributions.

    • Marked as answer by sww1 Friday, December 12, 2014 3:28 AM
    Monday, December 8, 2014 5:19 PM