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From: jaygreg on 8 Apr 2010 15:20
This involves the treatment of pension and social security checks in
Q2008 H&B... though the H&B portion is no longer of use.

My “Tax Schedule-2009” report is generating a “W2” section showing
amounts only in the tax sections. 2009 was my first full year
receiving pensions and SS checks so I’m still tweaking the process. I
seem to have set up both of these at some point as recurring
“paycheck” entries but then changed the pension to a recurring split
transaction (rather than use the form) along the way. Result is, the
SS transactions are generating W2 tax entries. Everything seems to
eventually flow to the proper 1099R and 1040 form sections … but I’m
left with pretty messy tax schedules and summaries.

What’s the cleanest way to enter recurring pension and social security
checks? It appears using the “Set up paycheck” routine generates W2
related stuff I just waste ink printing.
From: R. C. White on 8 Apr 2010 22:21
Hi, Jaygreg.

I've never used Quicken H&B and I don't get a pension. But I've been
drawing Social Security benefits for about 10 years. And I practiced public
accounting for 30 years before retiring about 20 years ago. Some things
have changed since then, such as IRS form numbers and many of the rules, but
the general pattern remains the same.

Neither SS benefits nor pensions should be on a W-2. The W-2 form is only
for reporting "compensation" for services rendered - what we usually call
salaries, wages, commissions, and such. In addition to reporting the
worker's income, the W-2 also reports income taxes and FICA taxes withheld
(plus state taxes when appropriate). I'm sure you've noticed that W-2
income goes onto Line 7 of Form 1040, but pensions go onto Line 16 and
Social Security onto line 20. (Both pensions and SS may need to be entered
first onto a schedule to determine how much is taxable.)

Pension payments are reported by the payer on Form 1099-R or a similar form.
Social Security benefits are reported on SSA-1099. If income tax is
withheld from the pension, this is shown on the form, too.

As you've probably noticed, SS checks arrive on a different day each month,
based on the day-of-the-month of your birthday. Since I was born on the
10th, my check arrives (via direct deposit) on the second Wednesday of each
month; that was March 10 this year and will be April 14. My wife's benefits
are based on my account, so her check arrives on the same day. If you have
Medicare Part B and/or Part D, the premium is deducted from your check.
Many retirees also have income tax withheld from their benefit checks.

Set up a Scheduled Transaction in Quicken, scheduled for "Monthly" on "The
_Second_ _Wednesday_ of every month" (for example), with "No end date".
It's a Split transaction; the gross amount is Social Security Income and the
Part B premium is a deduction, and the net amount is a deposit to your
checking account. In your Categories list, edit the benefits Tax Line Item
to "Form 1040LSocial Security Income, self". Make sure the Part B deduction
goes to "Medical:Insurance:Medicare Part B", NOT to Medicare Tax, and to
"Schedule A:Doctors, dentists hospitals". During your working years, you
paid the tax, which bought you the Part A (hospitalization) coverage; what
you are (optionally) paying now is a premium for insurance for doctors and
other medical expenses. The tax was not deductible; the medical insurance
premium is - at least, it might be, depending on the facts and arithmetic on
your itemized deductions schedule.

The details will be different for your other pension(s), but the general
pattern should be similar. IF you have income taxes withheld from your
pension, be sure to code it as a Transfer to an account such as [FIT
Withheld], not to an expense, so that it will accumulate during the year and
show as a credit for Tax Withheld on your Form 1040.

Be sure to check with your own CPA to be sure that the rules haven't changed
too much since I retired, and to see if there are quirks in your own
situation that I don't know about.

RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc(a)grandecom.net
Microsoft Windows MVP
(Using Quicken Deluxe 2010 and Windows Live Mail in Win7 x64)

"jaygreg" <jaygreg90(a)hotmail.com> wrote in message
news:5453a4d4-a239-4561-8e32-e9dd11bb0391(a)z7g2000yqb.googlegroups.com...
> This involves the treatment of pension and social security checks in
> Q2008 H&B... though the H&B portion is no longer of use.
>
> My �Tax Schedule-2009� report is generating a �W2� section showing
> amounts only in the tax sections. 2009 was my first full year
> receiving pensions and SS checks so I�m still tweaking the process. I
> seem to have set up both of these at some point as recurring
> �paycheck� entries but then changed the pension to a recurring split
> transaction (rather than use the form) along the way. Result is, the
> SS transactions are generating W2 tax entries. Everything seems to
> eventually flow to the proper 1099R and 1040 form sections � but I�m
> left with pretty messy tax schedules and summaries.
>
> What�s the cleanest way to enter recurring pension and social security
> checks? It appears using the �Set up paycheck� routine generates W2
> related stuff I just waste ink printing.

From: Boyd Colglazier on 9 Apr 2010 08:06
Use scheduled bill or deposit instead of paycheck.

"jaygreg" <jaygreg90(a)hotmail.com> wrote in message
news:5453a4d4-a239-4561-8e32-e9dd11bb0391(a)z7g2000yqb.googlegroups.com...
This involves the treatment of pension and social security checks in
Q2008 H&B... though the H&B portion is no longer of use.

My �Tax Schedule-2009� report is generating a �W2� section showing
amounts only in the tax sections. 2009 was my first full year
receiving pensions and SS checks so I�m still tweaking the process. I
seem to have set up both of these at some point as recurring
�paycheck� entries but then changed the pension to a recurring split
transaction (rather than use the form) along the way. Result is, the
SS transactions are generating W2 tax entries. Everything seems to
eventually flow to the proper 1099R and 1040 form sections � but I�m
left with pretty messy tax schedules and summaries.

What�s the cleanest way to enter recurring pension and social security
checks? It appears using the �Set up paycheck� routine generates W2
related stuff I just waste ink printing.


From: jaygreg on 11 Apr 2010 10:16
On Apr 9, 8:06 am, "Boyd Colglazier" <boydcolglaz...(a)gmail.com> wrote:
> Use scheduled bill or deposit instead of paycheck.
>
> "jaygreg" <jaygre...(a)hotmail.com> wrote in message
>
> news:5453a4d4-a239-4561-8e32-e9dd11bb0391(a)z7g2000yqb.googlegroups.com...
> This involves the treatment of pension and social security checks in
> Q2008 H&B... though the H&B portion is no longer of use.
>
> My “Tax Schedule-2009” report is generating a “W2” section showing
> amounts only in the tax sections. 2009 was my first full year
> receiving pensions and SS checks so I’m still tweaking the process. I
> seem to have set up both of these at some point as recurring
> “paycheck” entries but then changed the pension to a recurring split
> transaction (rather than use the form) along the way. Result is, the
> SS transactions are generating W2 tax entries. Everything seems to
> eventually flow to the proper 1099R and 1040 form sections … but I’m
> left with pretty messy tax schedules and summaries.
>
> What’s the cleanest way to enter recurring pension and social security
> checks? It appears using the “Set up paycheck” routine generates W2
> related stuff I just waste ink printing.

It looks like you're right, Boyd. I need to stop using the form and
simply enter scheduled transactions for these two.
From: jaygreg on 11 Apr 2010 10:25
On Apr 8, 10:21 pm, "R. C. White" <r...(a)grandecom.net> wrote:
> Hi, Jaygreg.
>
> I've never used Quicken H&B and I don't get a pension.  But I've been
> drawing Social Security benefits for about 10 years.  And I practiced public
> accounting for 30 years before retiring about 20 years ago.  Some things
> have changed since then, such as IRS form numbers and many of the rules, but
> the general pattern remains the same.
>
> Neither SS benefits nor pensions should be on a W-2.  The W-2 form is only
> for reporting "compensation" for services rendered - what we usually call
> salaries, wages, commissions, and such.  In addition to reporting the
> worker's income, the W-2 also reports income taxes and FICA taxes withheld
> (plus state taxes when appropriate).  I'm sure you've noticed that W-2
> income goes onto Line 7 of Form 1040, but pensions go onto Line 16 and
> Social Security onto line 20.  (Both pensions and SS may need to be entered
> first onto a schedule to determine how much is taxable.)
>
> Pension payments are reported by the payer on Form 1099-R or a similar form.
> Social Security benefits are reported on SSA-1099.  If income tax is
> withheld from the pension, this is shown on the form, too.
>
> As you've probably noticed, SS checks arrive on a different day each month,
> based on the day-of-the-month of your birthday. Since I was born on the
> 10th, my check arrives (via direct deposit) on the second Wednesday of each
> month; that was March 10 this year and will be April 14.  My wife's benefits
> are based on my account, so her check arrives on the same day.  If you have
> Medicare Part B and/or Part D, the premium is deducted from your check.
> Many retirees also have income tax withheld from their benefit checks.
>
> Set up a Scheduled Transaction in Quicken, scheduled for "Monthly" on "The
> _Second_ _Wednesday_ of every month" (for example), with "No end date".
> It's a Split transaction; the gross amount is Social Security Income and the
> Part B premium is a deduction, and the net amount is a deposit to your
> checking account.  In your Categories list, edit the benefits Tax Line Item
> to "Form 1040LSocial Security Income, self".  Make sure the Part B deduction
> goes to "Medical:Insurance:Medicare Part B", NOT to Medicare Tax, and to
> "Schedule A:Doctors, dentists hospitals".  During your working years, you
> paid the tax, which bought you the Part A (hospitalization) coverage; what
> you are (optionally) paying now is a premium for insurance for doctors and
> other medical expenses.  The tax was not deductible; the medical insurance
> premium is - at least, it might be, depending on the facts and arithmetic on
> your itemized deductions schedule.
>
> The details will be different for your other pension(s), but the general
> pattern should be similar.  IF you have income taxes withheld from your
> pension, be sure to code it as a Transfer to an account such as [FIT
> Withheld], not to an expense, so that it will accumulate during the year and
> show as a credit for Tax Withheld on your Form 1040.
>
> Be sure to check with your own CPA to be sure that the rules haven't changed
> too much since I retired, and to see if there are quirks in your own
> situation that I don't know about.
>
> RC
> --
> R. C. White, CPA
> San Marcos, TX
> (Retired.  No longer licensed to practice public accounting.)
> r...(a)grandecom.net
> Microsoft Windows MVP
> (Using Quicken Deluxe 2010 and Windows Live Mail in Win7 x64)
>
> "jaygreg" <jaygre...(a)hotmail.com> wrote in message
>
> news:5453a4d4-a239-4561-8e32-e9dd11bb0391(a)z7g2000yqb.googlegroups.com...
>
> > This involves the treatment of pension and social security checks in
> > Q2008 H&B... though the H&B portion is no longer of use.
>
> > My “Tax Schedule-2009” report is generating a “W2” section showing
> > amounts only in the tax sections. 2009 was my first full year
> > receiving pensions and SS checks so I’m still tweaking the process. I
> > seem to have set up both of these at some point as recurring
> > “paycheck” entries but then changed the pension to a recurring split
> > transaction (rather than use the form) along the way. Result is, the
> > SS transactions are generating W2 tax entries. Everything seems to
> > eventually flow to the proper 1099R and 1040 form sections … but I’m
> > left with pretty messy tax schedules and summaries.
>
> > What’s the cleanest way to enter recurring pension and social security
> > checks? It appears using the “Set up paycheck” routine generates W2
> > related stuff I just waste ink printing.

I need a little clarification, R.C., regarding:

> It's a Split transaction; the gross amount is Social Security Income and the
> Part B premium is a deduction, and the net amount is a deposit to your
> checking account. In your Categories list, edit the benefits Tax Line Item
> to "Form 1040LSocial Security Income, self". Make sure the Part B deduction
> goes to "Medical:Insurance:Medicare Part B", NOT to Medicare Tax, and to
> "Schedule A:Doctors, dentists hospitals".

The gross SS is correctly flowing to "Form 1040LSocial Security
Income, self". but I have the Part B deduction flowing to "Schedule
A:Doctors, dentists hospitals".

Q1) Part B setup is wrong?
Q2) Change the Part B tax line to another from the list called
"Medical:Insurance:Medicare Part B" (or something similar)?
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