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Posted by Laura on August 5, 2007, 7:46 pm
Please log in for more thread options > wrote:
>> I'm using QP2007. 2006 was the first year that I was required to pay
>> estimated tax payments. So I created two subcategories to handle this:
>>
>> Tax:MI1040-ES and Tax:US1040-ES and applied the appropriate tax line
>> item assignments.
>>
>> Last year I overpaid both state and US taxes by a few hundred dollars
>> and at tax filing time, just had the overage applied to 2007, thereby
>> reducing the size of my estimated tax payments for this year.
>>
>> For my 2007 quarterly payments, I've set up each transaction using a
>> split, whereby the full amount due is a positive amount, and the amt
>> applied from 2006 is a negative amount. (Same categories for each
>> split.) This, of course, means that although the transactions look
>> fine, the tax reports are wrong, because they only show the amount
>> actually paid in 2007 (reduced by the amount paid in 2006).
>>
>> BTW, the feds applied my entire overage to my first payment, but the
>> state broke it out over several payments, so my April payment for the
>> state ended up being $0.
>>
>> Any input on how I should handle this situation in Quicken so it's
>> properly documented in my reports ... esp come tax time? I've looked
>> through the category list and the corresponding tax line item
>> assignments, but I can't find anything related to overpayment of
>> estimated taxes, just underpayment.
>>
>> TIA and Regards,
>>
>> Margaret
>
> Part of your problem with this situation is that QW only looks at the
> calendar year in compiling tax data.
>
> Haven't completely wrung this out but some thoughts here to hopefully
> lead to a solution.
>
> One way to get around this might be to create a "Holding Account".
> Using the overpayment of Fed taxes as an example;
> Credit the Holding Acct with the 06 overpayment - dated 12/31/06.
> Debit the Holding Acct when estimated payments are made in 07.
> The amount of the debit will be the amount of the 06 overpayment that
> is applied.
> In the end, the Holding Acct will zero out.
>
> For the state, the situation might be slightly different.
> Question - Is the 06 state overpayment actually equivalent to a state
> refund and therefore reportable in your 07 Fed return??
> The answer here might alter the approach slightly - but would be
> similar to the handling of the Fed taxes.
Yes, this is actually a refund of the 06 taxes received in 07 but part of it
is applied to the 07 estimated taxes. I would code that "refund" as a normal
deposit with a 07 date (since it was received in 07) so that it appears on
the 07 reports.
> Seems one might credit the Holding Acct [dated 01/01/07] with the
> amount of the state 06 overpayment and with the category and tax line
> assignment for a reportable state refund.
> Then debit the Holding Acct for the estimated payments.
>
> Have not dealt with your situation but have a similar dilema with
> taxable dividends [or other distributions] received in Jan but
> reportable for the prior tax year. I use the Holding Acct approach to
> properly record these events - and satisfy QW's calendar year
> restrictions.
>
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