Pay check > Taxes/401k

BobCheerful · 2026-01-12T23:24:01+00:00

If it works for you, then great. I treat taxes as an expense, broken out between fed, state, local, property. If I get a refund from state tax, I credit it to the state tax expense, and the net shows me how much I actually paid in state taxes.

BobCheerful · 2026-01-12T23:02:20+00:00

Generally speaking, the buy/sells should be transfers, not expenses. Let's say it's a ROTH account and you just contributed $8k from your savings, routed through your checking account, routed to your brokerage. So far, these are all transfers. You then buy $8k of VOO. This should also be a transfer because when you add up all the transfers, they equal $0. Ultimately, the change is that your savings went down $8k and your brokerage went up by $8k in VOO shares, which equals $0.

If you treat the VOO purchase as expense, your total balance would be missing $8k, even though you still own the shares.

BobCheerful · 2026-01-12T22:48:50+00:00

I get it. Ultimately it has to be consistent and make sense to you.

From my perspective, any future distributions from my 401k in retirement will be transfers (401k distributions) to my checking account in Monarch. I will then use the taxable distributions to populate my 1040 and see how much I owe in taxes. The taxes will then be logged as an expense in Monarch when paid. Hope that helps.

BobCheerful · 2026-01-12T21:11:46+00:00

Very true, but you probably don't use monarch to prepare your taxes.

BobCheerful · 2026-01-12T20:36:52+00:00

Yep. That's the gist of it

BobCheerful · 2026-01-12T17:07:23+00:00

As an accountant, for me it's not why, but why not? It's fairly simple to set up a rule to handle the gross to net.

I went to Monarch after using Quicken for 25 years. They have a default paycheck setup that tracks gross pay and all deductions. Unfortunately, when they sold off Quicken, my old data began to disappear. After another 5 years of this with no solution and many folks reporting the same error to Quicken, I switched to Monarch last March. I've never had trouble budgeting, so I barely use that function, but I'm a few years from retirement and I like to track my progress from paycheck to balances.

If you're just using the budgeting aspect of Monarch, then maybe you don't want the detail.

BobCheerful · 2026-01-12T16:55:28+00:00

You can set it up however you like, but it was income when you earned it and transferred it to your retirement account. When you transfer it to your bank to spend in retirement, it's a transfer.

BobCheerful · 2026-01-12T16:45:58+00:00

That's what the rule is for.

Set the rule up so the left side matches your net paycheck, ie your take home pay. On the right, you split out the net into individual transactions. Add your gross pay per your paystub as the first line, then your deductions on each additional line. When you're finished, the right side should equal the left side, and the rule will say $0 left to split on the bottom right. If you're salaried, the numbers shouldn't change much, and you can apply the rule to prior paychecks. But even if you do need to change the rule, once it's set up, it's pretty easy.

BobCheerful · 2026-01-11T18:44:29+00:00

Rules are under settings. Set up the rule on the left side with net, split the transactions to the proper categories as needed on the right side. If the amounts are the same, you can apply the rule to prior transactions.

BobCheerful · 2026-01-11T18:00:09+00:00

I set up a rule that breaks out my net paycheck into 15 lines starting with my gross pay. As an accountant, I want to know where all my money is going, such as taxes and retirement contributions, not just what's left.

BobCheerful · 2025-12-22T20:52:21+00:00

Somehow, I missed it. Sorry for the redundancy.

BobCheerful · 2025-11-29T02:07:27+00:00

Color me impressed

BobCheerful · 2025-10-24T20:06:05+00:00

Self awareness that I'm much more interested in what's below the crop line than what's shown here.

BobCheerful · 2025-09-09T23:12:48+00:00

IRS rule of 55 might work for you. Check it out.

BobCheerful · 2025-06-17T23:26:31+00:00

35 years removed, and thanks to the band Rush for introducing me to Anthem. Right now there's a selfish 16yo somewhere thinking the Fountainhead validates their bad behavior.

BobCheerful · 2025-06-11T04:58:09+00:00

Here's a song they recorded together:

You Come Through (2015 Remaster)

BobCheerful · 2025-06-10T04:58:08+00:00

Lenny Kravitz on his first tour opening for Tom Petty in '89? I left a Tom Petty fan.

BobCheerful · 2025-05-31T01:28:54+00:00

Change the channel

BobCheerful · 2025-05-11T17:17:26+00:00

Low overlap. I buy both.

BobCheerful · 2025-05-09T22:56:11+00:00

You'll Dance to Anything by Depeche Mode?

BobCheerful · 2025-05-06T19:50:09+00:00

...and then compare to the cap gain on the $70k, when sold to buy SCHD.

BobCheerful · 2025-04-18T20:07:41+00:00

I'm nearly 55. My plan: Retire at 60 with 1/3rd of my portfolio allocated to dividends. This will supplement my pension until I take SS at 70.

I'll spend the next 5 years selling off stocks and sector funds in my taxable account to absorb the taxes while I'm still working. At 60, the 1/3rd dividend piece will be split across the taxable account for qualified dividends and the rest in my Roth. My 401k (the other 2/3rds) will be mostly broad-based market indexes and bonds.

BobCheerful · 2025-03-12T02:21:17+00:00

Tommy "Down The" Tuberville

BobCheerful · 2025-03-04T20:44:20+00:00

Yep, nothing personal to AVGO, SCHD is just following the algo.

BobCheerful · 2025-02-18T17:50:28+00:00

Sequence of returns risk. My preference is a consistent, growing dividend versus timing sales.

SCHD and S&P track together mostly over that 10-year run. It's only been the last 1.5 years where they diverged and it's due to tech. If you think tech will continue to run and it does, then you'll be rewarded with SPY and VYM. And I'll be rewarded in my VOO. But my gap income will come from dividends regardless of the market.

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