Early withdrawal penalties on certificates of deposit are a special type of tax-deductible expense. Like IRA contributions, alimony, and a few other items, these penalties are deductions from your total income and are used to calculate your adjusted gross income.
Because of this, be sure to record any early withdrawal penalties you pay with a separate transaction. If you’re using an investment account with a linked cash account, record the early withdrawal penalty as if it were paid from the cash account.
If you’re not using an investment with a linked cash account, use the Easy Actions menu’s Miscellaneous Expense command. In either case, when you do record the early with drawal penalty, categorize the early withdrawal penalty expense in a way that lets you easily report this penalty on your income tax return. (You might want to set up a new expense category called Early Withdrawal Penalty.)
Tracking Other Debt Securities
You can use Quicken to keep records of most other debt securities. Understanding Quicken’’ss Annual Return
Calculations Quicken’s Investment Performance report calculates an internal rate of return for each security. Here we’ll describe why you use the internal rate of return (IRR) tool and show how it compares with the other standard performance measurement tools.
No related posts.