Track tax payments

Certain tax payments, such as state taxes, are often deductible. How do you track your tax payments to assure you're getting the greatest tax benefits possible? Categorize them, of course. Click a link below for more information.

Tracking your tax bills

•   Federal

  When it's time to pay your taxes, you need to create a new category and call it Fed Tax Paid  if you have to pay an additional amount when you file your income tax return. When you set up this category, remember to leave the Tax-related check box cleared and the Tax line item field empty. When these are filled in, Quicken usually flags the category as one that raises or lowers your taxes. This tax payment isn't tax deductible, so this category shouldn't be linked to any tax schedule or even marked as tax related.

•   State

  On the other hand, state income taxes are usually deductible. If you pay additional state income taxes at the time you file your state tax return, these taxes are generally deductible in the year paid. Set up a new category called State Taxes and assign the category to Schedule A:State income taxes.

•   Local

  Local income taxes are also usually deductible. If you pay additional local income taxes at the time you file your local income tax return, these taxes are deductible in the year paid. Set up a new category called Local Taxes and assign the category to Schedule A, Local income taxes.

Tracking income taxes withheld from your salary

•   State

  These state taxes are also deductible, but should be tracked differently from the state taxes you might pay with your state tax return. Assign the transaction to the Tax:State or Tax spouse:State category that is assigned to tax form line item W-2:State tax withheld self or W-2:State tax withheld, spouse, respectively.

•   Local

  These local taxes are also deductible, but should be tracked differently from the local taxes you might pay with your local tax return. Assign the transaction to the Tax:Local or Tax Spouse:Local category that is assigned to tax form line item W-2:Local tax withheld, self or W-2:Local tax withheld, spouse, respectively.

Tracking estimated tax payments

•   Federal

  Many people must also make federal estimated tax payments quarterly to avoid tax penalties. If you make such payments, create a new category called Fed Est Tax and assign it to Form 1040:Federal estimated tax, qrtrly.

  When you make an estimated tax payment, assign the transaction to this category. Your Tax Schedule report will display all the payments you've made to date. When you transfer your Quicken data to TurboTax, these estimated payments are transferred to the Tax Payments worksheet.

  After importing Quicken data into TurboTax, you must verify that the correct quarterly payment was imported to the correct quarter of the Tax Payments worksheet. You may need to enter your fourth quarter installment directly into TurboTax if you made the payment after the end of the calendar year.

•   State

  Many people must make state estimated tax payments quarterly to avoid tax penalties. If you make such payments, create a category called State Est Tax and assign it to Schedule A:State estimated tax, qrtrly.

  When you make an estimated tax payment, assign the transaction to this category. Your Tax Schedule report will display all the payments you've made to date. When you transfer your Quicken data to TurboTax, these estimated payments are transferred to the Tax Payments worksheet.

  After importing into TurboTax, you must verify that the correct quarterly payment was imported to the correct quarter of the Tax Payments worksheet. You may need to enter your fourth quarter installment directly into TurboTax if you made the payment after the end of the calendar year.

Tracking your tax refunds

•   Federal

  When you receive your tax refund, you need to create a new income category. Call it Fed Tax Refund. When you set up this category, leave the Tax-related check box cleared and the Tax line item field empty. When these are filled in, Quicken flags the category as one that raises or lowers your taxes. Your federal tax refund isn't taxable, so this category shouldn't be linked to any tax schedule or even marked as tax related.

•   State

  On the other hand, your state tax refund is generally taxable if you took an itemized deduction for state income tax in the previous year. When you receive your refund from the state, use the Tax Refund category.

•   Local

  Your local tax refund is also generally taxable if you took an itemized deduction for local income tax in the previous year. When you receive your refund from the local government, create a new income category called Local Tax Refund and assign it to Form 1099-G:State and local tax refunds.