Recording withheld for taxes

kevin willoughby's Avatar

kevin willoughby

14 Jan, 2021 09:19 PM

I've sold some share of a mutual fund from within an IRA account. Some of the money went into the IRA as cash. Some of the money was withheld and sent to the federal and state tax bureaus. How do I record the withheld moneys in my Moneydance account?

I'm running Moneydance 2020.1 (1928) on macOS Catalina with all patches.

  1. 1 Posted by dwg on 14 Jan, 2021 09:46 PM

    dwg's Avatar

    I'm a fellow user.

    Typically you would receive only the net amount an it would be handled something like a split transaction. That is a bit hard with security sales.

    I suppose you could fudge it a bit and put it in as a "fee" with a tax category for the fee as part of the sale trasnaction.

    Another other way is to put the gross amount of the sale into the account then do a MiscExp transaction for the tax with the appropriate tax category.

    Yet another way is to place the entire amount to a category for Investment sales, then in the Investment account Bank register create a split transaction for the entire amount placing part in a taxation category and the remaining into the Investment account.

    Yes there is some "creativity" in some of the approaches it comes down to what you are trying to show and the detail needed.

    I have used the last approach when drawing down retirement funds that required taxes to be paid so I needed to classify the drawdown as a type of income so I had the right amounts classified for taxation purposes.

  2. 2 Posted by KevinWilloughby on 18 Jan, 2021 07:56 PM

    KevinWilloughby's Avatar

    Thank you for the advice. For me, recording just the net amount works best.

  3. 3 Posted by dwg on 18 Jan, 2021 08:09 PM

    dwg's Avatar

    I left out another method.

    It involves just using categories, you have your withholding tax category and you also have a Investment reporting category.

    In the investment account you just enter a transactions drawing on the Reporting category (which is not use in an reporting) with the funds going to the Tax category.

  4. System closed this discussion on 19 Apr, 2021 08:10 PM.

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