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[updated 7/20/2020]

If you agree with me that Microsoft Money is still the BEST personal (and small business) financial management software ever, then you’ve come to the right place for improving Money’s OFFLINE capabilities.

  • Even though Microsoft has elected to divorce the program from the MSN Money servers as of January 31st, 2011 (which did much more than just grab statement downloads, including independent stock and fund quotes for ALL of your investments, passing through third-party web-scrapes of your data, supporting Online banking, investment news, tax and exchange rates, LiveID password authentication, etc.), they have made available a **FREE**  legal copy (the SUNSET edition) of the latest updated  OFFLINE  version of  Microsoft Money Plus Deluxe that you can download, even if you’ve never used Money before!  On its own, it will only update via OFX statement files that you download through the websites of your financial institutions.
  • Now by installing the latest version of Python 2.7 (not 3) and Bobby’s PocketSense script package that runs on Python, you will be able to essentially mimic many of the online functions that Microsoft is no longer providing.
  • Another new program is available that will update all of your investment quotes in a very similar fashion to Money’s original online updater through MSN.  It is called MSMoneyQuotes and you’ll find links to it in this blog post.
  • For those that only need to update quotes (no Account Statement updates) and don’t wish to install Python scripting, Hung Le had written a Java app a year ago that has been recently updated and the link in the original Blog page has been updated with this new version.
  • I have developed Ameridan’s addon package to PocketSense that allows you to run these scripts (and review your Online investment data) from within your Money program.

 

All of the known working PocketSense sites.dat settings that I am aware of are listed (and continuously kept updated) in this
>>>>> blog page <<<<<
♦♦♦♦
Also, make sure you check out the
Look Up Your OFX Settings
portal page, with links to all of the other sources of OFX settings
that I am currently aware of

IMPORTANT!! 

1. If any Money Plus, 2007, or 2006 users use a Live ID (email address plus password), they should remove that with File-> Password Manager. This can only be done if they can get into the Money file. They should then use a local “Money password”, if they want a password at all. Money 2005 users don’t have this ability, and must continue to log in offline.

2. Do not attempt to reset your Live ID as the program may suggest. Any attempt to do so will not be effective. Only the credentials in effect at the time that you last successfully got in to your Money file will work.

3. Most users of Money should block all Money access from the Internet to prevent it from trying to access servers that no longer exist. This is a speed and convenience issue.  See my article “Eliminating the “online updating”delays and errors when opening Money” for details.

(a good portion of the following, is courtesy of Cal Learner)


Download links

*** More details are also available at http://moneymvps.org/  ***

US Money Sunset (Works with US and Canadian Files only; others see below)

Self-contained installation files for use (including if the original disk requires activation).   No direct online access works with the Sunset versions, which have been revised to be OFFLINE (access to MSN servers has been deactivated).

US Money Plus Deluxe Sunset

Downloadable from http://download.microsoft.com/download/2/5/5/2557D51B-AF4C-4123-8198-563ABA07337B/USMoneyDlxSunset.exe  [static link]
or use http://www.microsoft.com/en-us/download/details.aspx?id=20738

US Money Plus Home and Business Sunset
Downloadable from http://download.microsoft.com/download/C/1/B/C1BA4FFE-E119-4C19-8BD3-442F0E7E98A0/USMoneyBizSunset.exe  [static link]
or use http://www.microsoft.com/en-us/download/details.aspx?id=7564

Notes for North America:
1. US and Canadian Money 2005 and Essentials users — as well as other US and usually Canadian users — can use Money Plus Deluxe Sunset if they have to reinstall at some point.
2. Some US users of older versions of Money (Money 98 through Money 2003)  may have to use an additional step, by first installing a verson of US Money 2004 or 2005 to perform a file conversion before installing Money Plus Sunset. Here is a link to a minimally functional version of US Money 2005 (filename webinst.exe) that can be used for conversions: http://download.microsoft.com/download/D/B/7/DB72D4E0-FBD1-4B76-BFA0-1FF20F6AEC8D/M12USWEB.exe

Money 2005 UK – QFE2
Self-contained UK Money 2005 file including all available patches. Replaces all MS Money UK 2005 installation discs. Usually solves “Money cannot locate the file because it’s a read only file or you do not have permission to change it” error message.
Download from http://moneymvps.org/downloads/files/2005/Money2005-UK-QFE2.exe

Money 2005 International English QFE2
Self-contained Money 2005 International English installation file from Microsoft, including all updates (For Australia, New Zealand, Hong Kong and all other English versions other than for US, Canada, UK).
Download from http://moneymvps.org/downloads/files/2005/Money2005-IntlEngl-QFE2.exe

Money 2005 French – QFE3
Self-contained French Money 2005 file including all available patches. Replaces all MS Money French 2005 installation disks.
Download from http://download.microsoft.com/download/B/3/1/B31D6140-59FE-4D17-AF82-A2E77D0FCFFF/Money2005-FR-QFE3.exe.exe


Notes for all versions…

It is suggested that all Money users keep a good copy of the installation file, even if the need is not immediate. It will be needed if you reinstall Money in the future. Those links can change, so do a search if you don’t find the file you need. Since we don’t know how long these files will be available, it is best to keep a copy of your appropriate installation file in a safe place.

Regional versions

Money data files are in a different format for each region. The correct regional version of Money must be used or the data file will not open.

It is possible to convert from one region to another only by exporting data as loose qif and importing to the new regional version of Money.

Old Money versions will run only under 32-bit Windows

Old versions (Money 2000 and earlier) include 16-bit code so they can only run under 32-bit Windows (XP, Vista, 7 and 8).

To be able to use data files from these older versions on a 64-bit PC with Sunset Money:

  • Download m12usweb.exe (Trial edition of Money 2004) to the new computer.
    (MD5 is 1c62413858e2184eb39862f1b2afba44)
  • Put the latest *.mny and *.mbf files into the Documents folder of the new computer
  • Temporarily uninstall Sunset if you had already installed on new computer
  • Disconnect from the Internet (may not be needed, but recommended)
  • Set the computer date to 2004/1/1 (or there about)
  • Install trial Money 2004 by running  m12usweb.exe
  • Let that convert your *.mny file. Check that it seems to work. Save the converted file. Maybe change the name so that you can distinguish the converted file. Close Money 2004
  • Set the date right. Install/reinstall Money Plus Sunset. Let it uninstall Money 2004.
  •        Install the patch mentioned in red in the next paragraph
  • Let Sunset convert the Money 2004 *.mbf file to Sunset
  • Make extra copies of Sunset install, patch and data files onto other media

64-bit Windows

The U.S. Sunset versions of Money, downloadable above, run great in Win32 mode of Windows 8 and 10.  It is not a 64-bit program though, so hopefully,  Win32 remains supported within Windows for many years yet.  However because of a bug in the file mnyob99.dll, there may be issues with with certain OS updates.   It is recommended that a patched version of this file be used to resolve these issues and insure compatibility.  Read more (and find a link to the patch) here.

Internet Explorer

Money uses Internet Explorer as the GUI, so do not delete the program from your PC.  If Microsoft ever switches over exclusively to Edge, Money may cease to function, which is the primary reason why I have turned off Windows 10 automatic (and manual) updates, although I do intend to periodically catch-up with stable versions that remain Money-friendly.

Multiple Monitors

Money does not play well with multiple monitors, especially if one is disconnected at a later time, as might be the case with a laptop attached to other display(s) at work.  If you find Money not behaving properly (ie not appearing after engaging program, customize reports dialogue box disappearing, etc.), open sample.mny while the multiple monitors are hooked up, and insure that Money is closed in full-screen mode – and only on the primary (default) monitor.

Another alternative method that should also work:

Windows logo key img_59b0b16974940 + Tab Task View, allowing you to select hidden program and make it active.
Windows logo key img_59b0b16974940 + Shift + Left arrow or Right arrow Moves the active app on the desktop from one monitor to another.

Money version downloads

The latest Sunset versions are free for anyone to use, but are no longer supported by Microsoft.

The download links above might become unusable at any time, so remember to keep a secure copy of the downloaded installation file to your current version. Your data will be inaccessible if your Money program ever becomes corrupted (or if you procure a new PC), and you find yourself  unable to reinstall the same version of Money that corresponds with your data file.

-ameridan

Customizing Tax Categories

thumbs-up-sign_emoji-modifier-fitzpatrick-type-1-2_1f44d-1f3fb_1f3fbsc489 offered a great suggestion in the Money forum regarding the poor behavior of many of the program tab shortcuts, ever since Money went offline.  For instance, clicking on the INVESTING tab takes you to a MSN page, rather than the intended Investing Home Page, and this behavior can be rectified by renaming (need admin privileges) urlmap.xml to urlmap.xml_disabled (found in C:\Program Files (x86)\Microsoft Money Plus\MNYCoreFiles\WebCache).

It’s been 10 years, since the BUDGET, INVESTING, PLANNING and TAXES tabs worked properly!

taxnames.tbl

aha4aiconSo, while looking around in that folder, I discovered U.S. and Canadian tables that define tax categories, both within Money, and for our tax reports.  For instance, in the Tax software report with my Money Plus Home & Business Sunset, “Pension state tax withholding” has always been misspelled (Pension statel tax withholding), and I was able to fix this by changing the friendly name for item 530 in taxnames.tbl (towards the bottom of the file).

I like to keep Health Insurance expenses separate from “Doctors, dentists, hospitals, medicine and drugs“, and had always assigned them to “Other medicine and Drugs“.  By changing the friendly name for item 273 to “Health Insurance“, the category tracking

      • regular health and dental insurance premiums
      • Medicare B, D & G premiums
      • any IRMAA surcharges

corresponds for the Tax software report, and smooth exporting into Schedule A.

I prefer to track taxable and non-taxable Pension distributions as well, yet the categories were always defined as “Pension taxable distributions” and “Pension gross distributions“.  Rather than calculate the non-taxable portion, I’d rather enter that amount directly into my tax software.  I have always bunched my non-taxable distributions into the gross category, resulting in reports that were somewhat confusing.  By changing the friendly name for item 475 to “Pension non-taxable distribution“, that too is fixed!

Since the MNYCoreFiles folder has Read-only attributes, bring the file to your desktop, make your changes, and paste it back to the folder (need admin privileges) when saved/finished.

tax.tbl

It appears that you are able to refine tax categories, as well the Tax Form line numbers, as the IRS changes them over the years, by supplementing the table with new entries (2020:… rather than 2003:…). as evidenced at the end of the table for earlier tax years.  I haven’t yet played around with this table though.

tax table

 

Recording COVID-19 Small Business EIDL loan grant (and loan)

Note: This article is specific to U.S. Money Plus Home & Business Sunset

eidl
click to enlarge

I was asked by a blog reader, how an Economic Injury Disaster Loan (EIDL) grant (the forgivable advance on the CARES act loan, that was supposed to be $10,000) would be properly recorded, such that it doesn’t show up as income.  I’ve since learned that loans are not income, and Money Home & Business has a special provision for business loans which handles this specific situation quite nicely, including the proper handling for tax reports and Schedule C.

Unless you proceed with taking on the actual EIDL loan approved by the SBA (over and above the initial grant deposited into your business checking account), by inserting the grant amount as your opening balance, your loan liability amount will correctly show as $0.00, as shown above.

-ameridan

Null transactions scrubber issue (Schwab / Pocketsense)

I’ve discovered that the scrubRemoveZeroTrans subroutine sometimes leaves behind some stray data within the INVBANKTRAN tags, causing one of my Schwabxxx.ofx downloads to be rejected by Money (along with that day’s combined.ofx).  It took a little digging on my part, but the gap at line # 160 was a good clue!  I do not know if this is unique to Schwab, but the transaction shown really should have been reported as a SELL to the Cash account (other recently called and matured CDs are reported properly as SELL), rather than a $0.00 credit “memo”.  By changing the setting for SkipZeroTransactions from YES to NO, the Pocketsense downloads are now compatible.

I’m writing this up, so that Robert can perhaps address it, and if not, at least others will be able to resolve by (one of the following), should they encounter this issue:

  • manually removing the troublesome stray line
  • temporarily changing SkipZeroTransactions from YES to NO
  • waiting a day and then temporarily changing the download interval to 1 day, to avoid the troublesome transaction
Schwab issue
click to enlarge

[EDIT 4/13/2020]
thumbs-up-sign_emoji-modifier-fitzpatrick-type-1-2_1f44d-1f3fb_1f3fbI think Robert is going to revise the scrubber in an upcoming version, such that the routine only works on credit card transactions, and not investment transactions.

-ameridan

Fixing Citicard downloads

Sometime in the last week of February, someone programmed the ofx server to redact (substitute with X) the first 12 or 13 digits of your credit card number, resulting in Money not knowing which account the statement belongs to.  Although appropriate for documents, it shouldn’t take place in digital statements that are to be matched up to financial software data.  Thus far, their programming mishaps are more of an inconvenience issue, rather than a fatal error, since you will be prompted to match the statement to the appropriate Citi credit card.

I hesitated to write this article, thinking that someone (Quicken?) would encourage Citi to undo this inappropriate programming change, but it seems to have not been fixed yet.  For anyone wanting to have Pocketsense fix this issue for them as statements are downloaded, Cal Learner has written a scrubber routine that is easy to implement, will inform you which substitution has been made (if any), and will be unobtrusive should Citi return to properly reporting the actual account number.

For normal implementation, add these 2 lines of code, each in their appropriate sections (you’ll recognize similar code) of  scrubber.py:

from ps_subs import make_substitutions

if ‘CITI.COM’ in siteURL: ofx = make_substitutions(ofx)

(or simply download the scrubber.py file I’ve already modified) and add his ps_subs.py script into the same Python scripts folder, making sure to customize the redacted and actual account numbers to your situation (one pair of lines for each Citi account).


thumbs-up-sign_emoji-modifier-fitzpatrick-type-1-2_1f44d-1f3fb_1f3fbOf course, the same strategy can be modified to fit other substitutions for other financial institutions, as required.

-ameridan

How to handle accrued interest

Accrued interest is interest that has been earned, but not yet paid.  Every day you own a CD or bond, you earn another day’s worth of interest, which accrues to your benefit until you receive your periodic payment, usually every three or six months.

Unless we are purchasing new issue CDs and bonds, or happen to buy on the interest payment date, your purchase will probably include a certain amount of accrued interest that will be added to the purchase price.   This is interest from the last payment date to the day before your purchase, that rightly belongs to the seller, not you.  By paying for the accrued interest in your purchase, you provide the money to pay off the seller’s accrued interest.  On the next payment date, you’ll receive the full interest amount, which makes you whole for the upfront payment of accrued interest.  This accrued interest needs to be accommodated on your tax return, because it is taxable to the seller, not you.

Reporting Accrued Interest

Since most of the CDs I invest in are brokerage CDs, I treat all CDs as bonds in Microsoft Money, which works out well with ofx transaction downloads from my brokerage – other than the accrued interest portion.  If the accrued interest is entered within the purchase transaction , Money seems to ignore it in net income and tax reports…

CD purchase
click to enlarge

yet all is fine, if it entered separately.  Upon closer study of the downloaded brokerage transaction reflecting a CD I purchased 2 days ago  , I see that the accrued interest is reported outside of the  <INVBUY>, so if you go along with Money’s handling of the transactions, it works out well.

<BUYDEBT>
<INVBUY>
<INVTRAN>
<FITID>xxx
<DTTRADE> 20200205120000
<DTSETTLE> 20200207120000
<MEMO> DISCOVER BANK 3.15% CD FDIC INS DUE 03/20/29
</INVTRAN>
<SECID>
<UNIQUEID> 254673ZG4
<UNIQUEIDTYPE> CUSIP
</SECID>
<UNITS> xxx
<UNITPRICE> 100.000
<TOTAL> —xxx
<SUBACCTSEC> CASH
<SUBACCTFUND> CASH
</INVBUY>
<ACCRDINT> 1208.22
</BUYDEBT>

Similarly, I recommend creating a separate transaction for accrued interest ,

CD purchase1
click to enlarge

and as a reminder come time to do the taxes, you might include a note in the memo portion, like I do:

accrued interest, to be reported on Schedule B – payer: “Nominee Distribution —- Accrued Interest”


thumbs-up-sign_emoji-modifier-fitzpatrick-type-1-2_1f44d-1f3fb_1f3fbWith this method, the accrued interest will properly transfer onto your Schedule B when exporting your tax transactions, to insure that you won’t pay taxes on that interest twice.

-ameridan

 

Fixing Missing Business Transactions

Note: This article is specific to U.S. Money Plus Home & Business Sunset

For some unknown reason, I recently discovered some Payment for Invoice (a special category unique to the Business version of Money) transactions missing from various Business Income/Expense reports (as well as my Schedule C report), even though the transactions themselves were verified as still existing in the database, and only after some serious digging, was I able to finally resolve the issue.  In case anyone else is ever presented with the same mystery…

  • Under the Business tab, select Products & Services, and for each of the Services, select Details… 
  • Inspect the Category under Select an income category to track sales of this service: to see if it has been either cleared or changed to an incorrect entry
  • If so, restore the Category choice in the relational database, by once again choosing the proper Business Income category
  • As to the root cause as to how/why this occurred however, I come up blank.  Perhaps an overlooked program bug in the Business version, when doing some unusual operation like a quick file repair?

-ameridan

Discussion: Eliminating price data to reduce file size

Untitled

I’ve got daily Price data for Ford stock going back to the late 1980s (the stock, which we still own in a DRIP account, was given to my wife after she quit there), that I really don’t find any value in keeping (along with prices for many other investments, at the risk of my file size getting too large), so I backed up my file and proceeded to go to my Portfolio screen and:

  • Highlighted the Ford stock
  • Selected Update Prices
  • Selected Update Prices manually…
  • Moved down from yesterday’s entry
  • and held down the delete key, watching thousands of prices disappear

The process took me about 6 or 7 minutes, and only once, was I prompted as to whether I really wanted to delete a price, for a stock-split price from 19 years ago, to which I answered NO, since it stated that the stock-split transaction would be reversed.  I observed afterwards that investment transactions were not affected, but my ability to bring up a Price History graph for Ford stock was gone (no big deal).

Most of my entries were pre-2013 “Online” quotes, which I assume:

  • also include historical data such as last, change, open, high, low, 52 week high, 52 week low, PE, market cap and volume
  • this quote data consumes much more memory than post-2013 Pocketsense “Update” quotes from Yahoo, along with brokerage statement “Buy/Sell” prices, which are simply that day’s price
  • is the same larger amount of quote data that are in MS Money Quote “Online” quotes
  • the historical data associated with the deleted quote, is also deleted, when the price is manually deleted?

I then exited the program (US Money Plus Home and Business Sunset), selecting Save on the way out, and discovered that my file size went from 66,041 KB down to 63,360 KB.  2.68 MB reduction, and that’s just for one stock!

Before doing the same for other had-a-long-time investments, I’m going to insure that the missing price data has no other negative consequences.  For instance, the Capital Gains Estimator seems to be unimpaired.  I have brokerage CDs in my portfolio that also have daily price data (they are treated as bonds in my daily statement downloads), all of which I consider meaningless, since they are purchased, and will be redeemed – at par value.  In fact, I’d give up keeping my Price data for most of my other investments, if I can instead reduce my file size, such that I can continue to reliably use my Money data file for quite some time yet.

By deleting some more price data, I think I might be able to reduce my file size to less than 50 MB.  Does anyone see any cons?

I’m also wondering if Hung Le might develop a Sunriise type tool to clean out price data (perhaps it is capable of doing that already?).


[UPDATE 12/11/2019]
Bob Smiley later pointed out that Money has a tool to clean out prices (I didn’t even realize that option existed), but it only addresses securities that you no longer own.

If you go to the Portfolio, click “More…” on the left in “Other Tasks” you will see an option “Clear Historical Quotes”. This will do what you want – only keep weekly values.

Thanks Bob. I tried it out, and even though I see evidence that daily price data for securities I haven’t owned for years still exists, my file size was reduced further to 59,492 KB; that resulted in another 3.87 MB reduction!


[UPDATE 12/17/2019]
thumbs-up-sign_emoji-modifier-fitzpatrick-type-1-2_1f44d-1f3fb_1f3fbI’m happy to report that by deleting the prices for 3 more stocks that I’ve owned for quite a while, I’ve reduced my file size down to 56,226 KB, which is now 10 MB smaller than 1 week ago!!  

My main concern for keeping file size down, is so that I can keep using my primary database for as long as Money works, rather than having to start over, or using an archived database.

-ameridan

How to handle Roth IRA Conversions

1542676879-768x708
“What you should be doing NOW to avoid the stealth tax increases retirees face but are ignorant of…until it’s too late”

A small plug (even though I have no involvement):

After watching some videos on Josh  Scandlen’s  Heritage Wealth Planning – YouTube channel , I checked out his website  https://heritagewealthplanning.com/, and received a download offer for a FREE digital version of his book  The Tax Bomb In Your Retirement Accounts, in return for my email address.  I am so glad I accepted!

Note: If you exit out of the offer, I’m not sure if it will pop up again, but you can purchase it online.  You can also order the book from Amazon (at a significant discount).

aha4aiconI found it to be very eye-opening, as to how much money married couples can retain (I’m talking long-term; in total income taxes during your lifespan, and beyond; if you’re single, many of the advantages are gone) by “converting” traditional IRA investments into your Roth IRA accounts, rather than letting them remain in “traditional” status. 

You will be mandated to annually withdraw RMDs (required minimum distributions), starting at age 72, that get larger every year, in order to eventually deplete all of your traditional IRA account(s), leading to:  

  • Potentially significantly higher IRMAA surcharges in your later years, on top of your normal Medicare Part B (and Part D, if elected) insurance premiums
  • Taxation on a much greater portion of your Social Security benefits in your later years, and potentially putting you in a higher tax bracket, as well
  • Potentially significantly higher surviving spouse taxes (smaller standard deduction, lower tax bracket thresholds)
  • Estate/legacy taxes for IRA account beneficiaries (for non-spouse beneficiaries, new rules require complete distribution of traditional IRA accounts as ordinary income, within 10 years), potentially putting them in a higher tax bracket, and having to come up with the funds for the tax bill on the additional income
  • Possible surprise of being hit with a new 3.8% Net Investment Income Tax (NIIT) on income exceeding $200,000 (this one wasn’t mentioned in the book, but is perhaps more likely to hit you during the conversion year(s), rather than the RMD years)
  • Taxation on any/all income at much higher expected tax brackets in the future
  • Potentially significantly higher state income taxes in your later years (more states could eventually decide to start taxing retirement income, including IRA distributions)

Now I see why Josh states “IRA Distributions [Can Be] A Tax Nightmare!”
I highly recommend reading this book!


Roth conversion background

The money sitting in your traditional IRA is not 100% your money.  The IRS is waiting to get their piece of it, and converting a portion of one’s IRA results in a tax bill that many people would rather delay, which is probably why ROTH conversions are an under-utilized strategy.

Rather than converting in one fell swoop, if the balance in your Traditional IRA account(s) is sizable, it might be best to spread out the conversions (distributions) over a few years.  Also, it turns out that you do not need to sell your investment securities in your Traditional IRA accounts in order to transfer cash; you can transfer your chosen investments directly.  This wasn’t so obvious to me, until watching Josh’s videos, which probably explains why I kept putting off the conversion.

Since you do need to pay income taxes on the distributions, choose a group of investments such that, the sum total won’t put you in a tax bracket you’d like to avoid.  With last year’s Tax Reform, from now through 2025, taxes are essentially on sale.  What does this mean for most of us?  Our overall tax liability is probably lower than it has been over the past 20 years or more, which means more money in our pockets.

Unless you are currently high-income earners, a married couple can convert quite a bit of money, and not exceed the 24% bracket.  By doing the same in following years, you’ll eventually have converted a good portion, if not all, of your traditional accounts, but be aware that the conversion could also trigger the aforementioned surprise of the new 3.8% Net Investment Income Tax, if your conversion income exceeds $200,000 (single) / $250,000 (married-joint).

Untitled
(if married, $200K seems to be the sweet spot)

Here is how I’ve accounted for Roth conversions in Money

As an example, here is one of the secondary CDs that I chose to convert this year:

GOLDMAN SACHS BK 3.3% CD FDIC INS DUE 04/16/2024 ▓

In Money, I created a new transaction for this CD, using the “Transfer out” option while in the investment side of my traditional IRA account, and I selected my Roth IRA account as the destination (which reflects what I’d instructed my investment firm to do).  That may be the first time I’ve made use of that option with an investment; many of us do so with cash quite often.

aha4aiconWhile thinking about how I was going to remind myself that part of the transactions history of this investment will remain within the Traditional IRA account, I discovered that I can addend a “flag” ( ▓ ) onto the investment name (use the Rename option in Investment Details), which will easily identify those assets that have a split transaction history among multiple accounts, while viewing my Portfolio reporting screens.

Then in my Roth IRA cash account, I added one additional Split/Multiple Category Deposit transaction (with a net-zero total) that summarizes the total of this years’ transferred investments, to serve as my Tax software export transaction:

  • Category: Retirement Income
  • Subcategory: trad IRA Distributions (Dan)  {spouse should also have their own subcategory, for proper tax reporting}
  • Tax Form: assigned to “1099R”
  • Form Line: assigned to “IRA Taxable Distribution”
  • Copy: 2 {each 1099R form source should be assigned it’s own copy}
  • Payee: “IRA ROTH CONVERSION” 

roth conversion

thumbs-up-sign_emoji-modifier-fitzpatrick-type-1-2_1f44d-1f3fb_1f3fbIt really is that easy!

-ameridan

Improving Money’s handling of Investment Account Earnings

It is frustrating when you discover some flaws while using the single-entry “shortcuts” for investment transactions.  For instance,  dividends not showing up  in some reports, when using the “Reinvest Dividend” option or the entire amount of a sold bond being reported as interest in the “Tax Software” report, using the “Redeem CD/Bond” option, yet working properly if input as a “Sell” instead.

aha4aicon

 

If you would like Money to categorize investment account earnings more realistically, I have recently  learned a few tricks for doing so, that will not only result in more thorough and accurate reporting, but those earnings will also finally be reflected on the proper lines in your tax file exports.  This procedural change results in giving you the diverse range of options that you have for transactions in non-investment accounts (like Bank accounts).

  1. Enable Cash transactions in your Investment Accounts, even if there isn’t a Cash account per-se, to allow for using the dual-entry method for recording your transactions.
  2. Rename your category “Dividends” to “Qualified Dividends”, and change the Tax Form (Sch B) Form Line selection from “Total Dividend Income”, to “Qualified Dividends”.
  3. You can create a new “Ordinary Dividends” category, and assign the Tax Form (Sch B) Form Line “Total Dividend Income” to this category instead.
  4. investment activity choicesWhen recording the reinvestment of dividends, rather than using the built-in single-entry activity “Reinvest Dividends” (and this is the non-intuitive part), select “Other Income” as the activity, observe that a new Category field has opened up, where you now have control over assigning which type of dividend this was (hopefully qualified dividends), and transfer the entire amount of the dividend to the Cash side of that account.
  5. Now, in the second half of this dividend accounting, you can record all of the transaction details (quantity, price, fees and memo) as a “Buy”, from the Cash side of the account.

This “Other Income” trick is also useful in other Investment account income situations, such as “Tax-Exempt interest” and “Treasury Bill interest” (state + local tax exempt), which Money doesn’t normally otherwise accommodate.  To be fair, although not very intuitive (see the list of options, as shown above), the programmers have provided for the extended capabilities, even though it seems like it may have been an afterthought.   For more details, and step-by-step instructions for the special-case handling of T-Bills in particular, see my previous article.

Although there may be fewer instances where this may be needed, the same concept applies with “Other Expenses”, as well.


If you are a Trust fiduciary, you’ll also find “Other Income” quite useful in separating investment account earnings related to that Trust.  As an example:

  • create new category “Interest Income (Trust)”
  • assigned to Tax Form “Schedule K-1 Worksheet”
  • assigned to Form Line “Interest Income”

Now your tax file export will reflect that interest as being assigned to the trust beneficiary, who will then be responsible for paying the income tax on that interest.  Note: I use Money Plus Home & Business Sunset, so I’m not sure if the “Schedule K-1 Tax Form” selection is available in Money Plus Deluxe Sunset, or not.

-ameridan

U.S. Treasury bill transactions

Over the years, a few people have posed the question “How do you record the purchase and redemption of Treasury bills (T-bills), in Microsoft Money?”  Unlike other investments where the interest is posted to your account as interest, T-bill interest is “hidden interest”, and it is the difference between your discounted purchase price at auction, and the sell price @ 100 on the redemption due date.  It is also U.S. Government interest, which shouldn’t show up on your State and Local Tax returns, like regular interest.

Here is how I handle this special case:

BUY

Recording the purchase of T-bills is pretty straight forward, and they’ll be designated as bonds, just as I do CDs, with a normal par of 100.  In my case, I’ve set up a TreasuryDirect  investment account to hold all of my transactions with Treasury Direct.gov, but unlike most brokerage investment accounts, the Cash (transfer) portion will be the bank account that I’ve linked up, rather than the in-house brokerage Checking account*.

Example: (new) “BUY” of 100,000  “US TREASURY BILL DUE 6/4/2019”, an 8-week bill @ $99.629778 = $99,629.80

SELL

It appears that the redemption is the trickier part.  When a CD is sold @ 100 it doesn’t reflect hidden interest.  The interest is usually recorded separately as either Investment Interest or as Reinvested Interest.

t bill interest

First, I created a unique Investment Income sub-category “Treasury Bill Interest”, which I assigned to:

  • Tax form “Schedule B”
  • Form Line “U.S. government interest”

, so that the Tax transactions are treated as State & local non-taxable income correctly.

On the day of redemption, just like CDs, again two transactions will be needed:

1.  Record the interest as a separate investment activity, selecting “Other Income” as the activity.  I discovered that this allows you to then specify a category (otherwise not possible), which in this case will be “Investment Income : Treasury Bill Interest” (rather than the generic taxable Interest).

Example: (new) “OTHER INCOME” of 100,000  “US TREASURY BILL DUE 6/4/2019” of $370.20, assigned to Category “Treasury Bill Interest”, which for 8 weeks is the equivalent of a 2.429% APY 

2.  Then in the actual redemption transaction, record the actual sale properly at par, but offset the interest as commission, so the total doesn’t reflect that hidden interest.  Today, I discovered a flaw in the “Tax Software” report if “Redeem CD/Bond” is selected, rather than “Sell”, as the entire amount of the bond is reported as interest, so I would stick with “Sell”.

Example: (new) “SELL” of 100,000  “US TREASURY BILL DUE 6/4/2019” @ 100, less Commission of $370.20 = $99,629.80, rather than the actual $100,000 received, so no Capital Gain is invoked.

t bill interest1
click to enlarge

*   Note that if you are reinvesting within the TreasuryDirect account, simply enable “Track Cash transactions” in Settings, so that those bond redemptions and re-purchases are transferred to/from the virtual TreasuryDirect Cash account, rather than the linked Bank account, to avoid confusion and reflect reality.

-ameridan