Moshe, This issue has come up many times over the years, for the very reason you raised: a direct transfer from the IRA asset account to your Checking at account won't show as income in reports.
The best way I've seen for how to handle this requires that your initial pay records isolate the income you diverted to the IRA account. Technically, the income you sent to the IRA is separate, and should be categorized as "deferred income." In my books, that's meant that my paycheck entries have separate lines for the income that was sent to the IRA. So if I have a paycheck for $1,000, and send $50 to the IRA, the entry was: Income:W2 $950 -> Checking Income:IRA $50 -> IRA Asset (Note that this will match your W-2 at the time) When you take the distribution, you create one transaction for the transfer from the IRA to Checking, but then you create an extra transaction (or extra splits, if you prefer), which transfers the distribution amount from Income:IRA to Income:Retirement Distributions. This second account should be assigned as a taxable account. Then it will appear on the TXf report. You can also select just that account on income statements. David T. On Jan 12, 2023, 6:53 AM, at 6:53 AM, Milton Stern <drmos...@gmail.com> wrote: >Hi, > >Please see below ******** > >Moshe > >On Wed, Jan 11, 2023 at 7:06 PM R Losey <rlo...@gmail.com> wrote: > >> Hello. >> >> Assuming you take out $5,000 and they withhold 10% ($500), I would >use a >> split transaction... sell $5000 worth of the mutual fund, add $4500 >to your >> bank account, and $500 to federal income tax paid. >> > >> I apologize for not using "debit" and "credit" terms, but I'm not >sure I'd >> get them right. >> > >******** Agreed. The component that I am having trouble with is the >Pre-Tax >IRA Distribution component. Because it is a Pre-Tax IRA, the >distribution >is taxable as income. >********The direct "sell $5000 worth of the mutual fund, add $4500 to >your >bank account" direct transaction will not show up in Income Reports. > > >> >> You can track them however you wish, but the above is how I would do >> them... well, except, I never have the mutual fund withhold taxes; I >pay my >> own taxes quarterly. >> > >****** New for 2023. IRS requires the brokerage to withhold taxes from >IRA >Distributions. Last year you could specify 0% withholding. >****** They don't make it so easy this year. It is sort of a double >hit. >Even if you get it back as a tax refund, you can't put it back >(Rollover) >into the IRA to earn tax free. > > >> >> >> On Wed, Jan 11, 2023 at 4:35 PM Milton Stern <drmos...@gmail.com> >wrote: >> >>> Hi, >>> >>> What would be the recommended method of Entry for an IRA >Distribution? >>> >>> The Distribution is for a personal IRA (not Roth). >>> The IRA is of Mutual Funds. >>> >>> The Mutual Fund is in Assets > Investments - Retirement > Brokerage >> etc. >>> > etc. >>> >>> Since this is taxable income, I need to track withholding (Federal) >+ Net >>> Distribution to a Checking Account (Assets > Current Assets). >>> No Commission fees are applicable, but it would be nice to know >where/how >>> they would be tracked. >>> >>> Thank you in advance, >>> >>> Moshe >>> _______________________________________________ >>> gnucash-user mailing list >>> gnucash-user@gnucash.org >>> To update your subscription preferences or to unsubscribe: >>> https://lists.gnucash.org/mailman/listinfo/gnucash-user >>> ----- >>> Please remember to CC this list on all your replies. >>> You can do this by using Reply-To-List or Reply-All. >>> >> >> >> -- >> _________________________________ >> Richard Losey >> rlo...@gmail.com >> Micah 6:8 >> >_______________________________________________ >gnucash-user mailing list >gnucash-user@gnucash.org >To update your subscription preferences or to unsubscribe: >https://lists.gnucash.org/mailman/listinfo/gnucash-user >----- >Please remember to CC this list on all your replies. >You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
