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Using the Transfer category

Transfer category

You will find a Transfer category in Quicken's category list. This special category is considered neither income or expense. Transactions assigned to the Transfer category are excluded from income and expense reports and charts (because it records the movement of money between two accounts that belong to you.)
Assigning the Transfer category (or the Transfer subcategory "Credit Card Payment") does not create or imply a relationship between any other transactions in Quicken, such as transactions in a different account.
Appropriate uses of the Transfer category would include:

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• A transfer of money to a friend or relative as a gift.
• A transfer of money to a third party pay a bill or expense.
• a transfer of money to you from a third party, such as direct deposit of your paycheck or payment for services of goods.
• In short, any account-to-account "transfer" where you gain income or incur a real expense is probably best handled by the appropriate income or expense category--not a transfer.

Using a Linked Transfer

Using a Linked Transfer

A Linked Transfer creates an direct relationship between two transactions in different accounts tracked in Quicken. (If you've used older versions of Quicken for Mac or Quicken for Windows, this the classic Quicken transfer you've used in those products.)
Just like the Transfer category, a Linked Transfer is considered neither income nor expense and is excluded by default from spending reports.

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Handling credit card payments

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Quicken considers a transfer to be neither an income nor an expense transaction. As such transfers are excluded from Spending and Income reports and charts.
Suppose you are moving money from checking to savings. You did not spend (you still have the cash), and you did not earn income (you have same net worth you had before the transfer). As such, these transactions are neither income nor expenses.
The same logic applies to credit card payments (when you track your credit cards in Quicken, which is highly recommended). Your credit card account already contains a record of all your expenses (the credit card transactions). When you pay your credit card bill from your checking account, you do not want the entire payment amount to be considered an expense because this would cause you to double count your expenses.
For example: If you have $100 worth of charges on your credit card, which are tracked in Quicken using a credit card account, those transactions are already categorized as expenses and will show in Spending reports and charts (dining, entertainment, fuel, etc.).
If you then pay your bill in full with $100 from your checking account, you should consider this payment to be a transfer, not expense. Considering it an expense would incorrectly show you had $200 worth of spending. Instead you are transferring funds from a checking account to a credit card account.
The exception to this rule is if you do not pay your credit cards in full each month. In this case you are incurring an interest expense and should track the interest as an additional expense. If your financial institution includes your interest payment as a unique transaction within the downloaded transactions, you can just categorize that transaction as an expense. If the financial institution does not show the interest as a "transaction" (many do not), then you can split your credit payment--with the interest portion assigned an expense category and the remaining payment assigned as a transfer.

Splits and transfers

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A split transaction can include a transfer. It's handled just like any other split line item.
For example, you may want to transfer some of your paycheck into a retirement account. Or you might want to transfer the portion of your mortgage payment that goes toward the loan principal into a liability account that tracks the loan balance, and assign an expense category to the interest portion of the payment. For these cases, just create a split transaction and make one (or more) of the split lines a transfer by selecting the appropriate account from the Transfer column in the split window.

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