Q: How to enter tax refund?
nmon...@my-deja.com
Can someone help me by pointing out how to enter tax refund
(e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
as I can tell, it is not supposed to be an income account, nor
an expense account. But what kind of an account would it be entered
into?
Thank you,
Nima
Sent via Deja.com http://www.deja.com/
Before you buy.
Frederick Lonsdale
enter a category of Federal Income Tax when you deposit the refund in your
checking account. That way it would come out as a negative tax expense in
your cash flow/budget reports. You could also create a new category of
income, that would be for income items that are non-taxable or tax free.
(You might note that state tax refunds have a pre set category in Quicken. I
suppose that is because it is treated as income in the year you receive it
if you itemized deductions in the previous year on your federal return.)
The federal refund is really non-taxable (federal, state and local) income
in the year you receive it. If we were doing true accrual accounting, the
refund would be assigned to the prior tax year. But I do not know anyone who
trys to do accrual accounting with Quicken.
<nmon...@my-deja.com> wrote in message news:7vhurr$h1n$1...@nnrp1.deja.com...
The Z Man
<nmon...@my-deja.com> wrote in message news:7vhurr$h1n$1...@nnrp1.deja.com...
> Hi,
> Can someone help me by pointing out how to enter tax refund
> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
> as I can tell, it is not supposed to be an income account, nor
> an expense account. But what kind of an account would it be entered
> into?
Federal income tax is an expense. Accordingly, a tax refund is a reduction
of an expense, and should be entered into the same account you enter the
expense. The resulting expense balance will be the same amount as if you had
originally paid the correct amount of federal income and not received a
refund. Hope this helps.
Dan Swartzendruber
> Hi,
> Can someone help me by pointing out how to enter tax refund
> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
> as I can tell, it is not supposed to be an income account, nor
> an expense account. But what kind of an account would it be entered
> into?
Here's what I would do: if the original taxes that were being withheld
were categorized as, say, Taxes:Federal, then put the refund down in the
same category (except as a credit, not a debit). Example, you have 12
monthly paychecks, each with, say, $500 in Taxes:Federal. When you do
your taxes, you get $1000 back. You put that as a credit of
Taxes:Federal, so that when all is said and done, you paid a total of
$5000 in federal taxes ($6000 paid out and $1000 paid back in).
The Z Man
Jerry Boyle
"Fed Tax Refund" and to leave the tax-related checkbox cleared and the Form
box empty.
Then enter a transaction with this category into whichever account you
deposited your refund check.
You got quite a varied response to this question. Good luck in figuring out
whose advice to take :-) .
Richard J. Yanco
> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
> as I can tell, it is not supposed to be an income account, nor
> an expense account. But what kind of an account would it be entered
> into?
I have a number of accounts set up: one for income from work, one
for federal tax withheld, and one for state tax withheld. All are
asset accounts.
When I receive each paycheck, I make one transaction for Salary,
simply increasing the amount of money that my employer owes me.
I make a second transaction, representing what happened to my
earnings:
Net pay is a transfer to my checking account;
Federal tax is a transfer to my Federal Tax Withheld account;
State tax is a transfer to my State Tax Withheld account;
Other taxes (e.g., FICA) go to the appropriate categories.
This allows me to see, at any time, how much federal and state tax has
been withheld to date.
Come April 15, or whenever, my actual tax is categorized as Tax (Fed or
State), and my tax refunds are transfers to my checking account. These
four numbers sum to my withholdings as of the previous December 31.
It's nice to remember that your federal and state withholdings are
interest-free loans to the government, until the day you actually owe
your taxes. Setting up Quicken to represent reality is a good thing.
Of course, I'm not sure how this would affect Quicken's tax prep
features, because I don't use them.
Hope this helps.
Rick
Bill H
>Hi,
> Can someone help me by pointing out how to enter tax refund
>(e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
>as I can tell, it is not supposed to be an income account, nor
>an expense account.
In Quicken you only have "accounts" to represent real accounts such as
checking and credit card accounts.
For income and expenses you use CATAOGRIES.
Bill
> But what kind of an account would it be entered
>into?
>
KLH
were neither income nor expense. Their solution was to categorize them as a
"Net Worth Transfer." That is the way I have been handling most of these
types of items for years. (I do not categorize tax refunds that way, as
they are potentially income to me).
I do not like the Net Worth Transfer solution, but have not come up with a
better way. My Net Worth Transfer total is HUGE! I "hide" it so that it
does not affect the totals that Quicken shows.
If anyone has a better idea, I would like to hear about it, but for now will
have to continue the Net Worth Transfer route...
Ken
Fred H Smith
create an account for it. Then enter a transaction dated December 31st of
the tax year. Post the amount to your income tax category (the same one you
use when you enter your paychecks). Then when you receive the refund, post
it to this account.
This way, any financial statements you run will be correct, regardless of
which period you ask for.
Regards,
Fred.
<nmon...@my-deja.com> wrote in message news:7vhurr$h1n$1...@nnrp1.deja.com...
> Hi,
> Can someone help me by pointing out how to enter tax refund
> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
> as I can tell, it is not supposed to be an income account, nor
> an expense account. But what kind of an account would it be entered
Bill H
As the refund is for a prior year, but being received this year it
will screw up the reports of how much tax you have paid THIS YEAR.
It needs to be a separate catagory (or sub-catagory).
Bill
On Sun, 31 Oct 1999 21:46:07 -0500, Dan Swartzendruber
<dsw...@druber.com> wrote:
>In article <7vhurr$h1n$1...@nnrp1.deja.com>, nmon...@my-deja.com says...
>> Hi,
>> Can someone help me by pointing out how to enter tax refund
>> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
>> as I can tell, it is not supposed to be an income account, nor
>> an expense account. But what kind of an account would it be entered
>> into?
>
Bill H
<freds...@yahoo.com> wrote:
>A tax refund is actually an asset. To account for it properly, you should
>create an account for it. Then enter a transaction dated December 31st of
>the tax year. Post the amount to your income tax category (the same one you
>use when you enter your paychecks).
Actually that should be an EXPENSE catagory that you use for you tax
payments (and deductions). BTW, the only differnece between an expense
and an income catagory is where it is sorted in the reports.
>Then when you receive the refund, post
>it to this account.
>
>This way, any financial statements you run will be correct, regardless of
>which period you ask for.
The use of the temporary account to time shift is very good. The same
type of time is used in reverse to the Jan estimated tax payment.
NOWEVER, there is a real problem with your method. There are two
different "things" that you need to track for taxes. The taxes PAID to
the IRS and the NET taxes paid. You do not what this to reduce the
taxes paid.
One way of handling this is to setup an FedTax Catagory and then have
W2 withholding, Estimated taxes paid, and Tax Refunds as separate
catagories.
Bill
>
>Regards,
>Fred.
>
><nmon...@my-deja.com> wrote in message news:7vhurr$h1n$1...@nnrp1.deja.com...
>> Hi,
>> Can someone help me by pointing out how to enter tax refund
>> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
>> as I can tell, it is not supposed to be an income account, nor
>> an expense account. But what kind of an account would it be entered
>> into?
>>
Bill H
<fredlo...@mediaone.net> wrote:
>I am not sure how this would effect how you keep records, but you could
>enter a category of Federal Income Tax when you deposit the refund in your
>checking account. That way it would come out as a negative tax expense in
>your cash flow/budget reports. You could also create a new category of
>income, that would be for income items that are non-taxable or tax free.
Wrong year, wrong catagory. See my other replies.
Bill
>(You might note that state tax refunds have a pre set category in Quicken. I
>suppose that is because it is treated as income in the year you receive it
>if you itemized deductions in the previous year on your federal return.)
>
>The federal refund is really non-taxable (federal, state and local) income
>in the year you receive it. If we were doing true accrual accounting, the
>refund would be assigned to the prior tax year. But I do not know anyone who
>trys to do accrual accounting with Quicken.
>
Bill H
wrote:
>
><nmon...@my-deja.com> wrote in message news:7vhurr$h1n$1...@nnrp1.deja.com...
>> Hi,
>> Can someone help me by pointing out how to enter tax refund
>> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
>> as I can tell, it is not supposed to be an income account, nor
>> an expense account. But what kind of an account would it be entered
>> into?
>
>Federal income tax is an expense. Accordingly, a tax refund is a reduction
>of an expense, and should be entered into the same account you enter the
>expense. The resulting expense balance will be the same amount as if you had
>originally paid the correct amount of federal income and not received a
>refund. Hope this helps.
CAUTION. Taxes paid is what you report on the 1040 as W2 withholding
or estimate tax payments. You do not want to reduce these for cash
refunds.
Bill H
genral refunds should be shown as desposits to the orginal expense
catory.
BUT not for taxes as they are year dated.
What kind of other transactions are you using the "net worth transfer"
for. There are other solutions.
Bill
Brian R. Hamilton
(Taxes:Income-Federal, in my case). I don't use accounts for such things, just
Categories.
<nmon...@my-deja.com> wrote in message news:7vhurr$h1n$1...@nnrp1.deja.com...
> Hi,
> Can someone help me by pointing out how to enter tax refund
> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
> as I can tell, it is not supposed to be an income account, nor
> an expense account. But what kind of an account would it be entered
> into?
>
Frederick Lonsdale
about true accrual accounting.
Bill H <bi...@birch.net> wrote in message
news:381db80c...@news.birch.net...
> On Sun, 31 Oct 1999 21:08:32 -0500, "Frederick Lonsdale"
> <fredlo...@mediaone.net> wrote:
>
> >I am not sure how this would effect how you keep records, but you could
> >enter a category of Federal Income Tax when you deposit the refund in
your
> >checking account. That way it would come out as a negative tax expense in
> >your cash flow/budget reports. You could also create a new category of
> >income, that would be for income items that are non-taxable or tax free.
>
> Wrong year, wrong catagory. See my other replies.
>
> Bill
>
>
> >(You might note that state tax refunds have a pre set category in
Quicken. I
> >suppose that is because it is treated as income in the year you receive
it
> >if you itemized deductions in the previous year on your federal return.)
> >
> >The federal refund is really non-taxable (federal, state and local)
income
> >in the year you receive it. If we were doing true accrual accounting, the
> >refund would be assigned to the prior tax year. But I do not know anyone
who
> >trys to do accrual accounting with Quicken.
> >
Dan Swartzendruber
> In general that is the way to do refunds. BUT NOT FOR TAXES.
>
> As the refund is for a prior year, but being received this year it
> will screw up the reports of how much tax you have paid THIS YEAR.
ick. yeah, you're right.
> It needs to be a separate catagory (or sub-catagory).
double ick, but i can't think of a better solution :(
Bill H
Neting it out against Fed Tax Paid will REDUCE the amount of tax that
is show that you have paid out this year when you do your taxes. It
will NOT MATCH your W2 and/or Estimated tax payments.
If you setup another cataogory that will be find (I prefer a generic
Federal Tax catagory and sub-catagories for W2, Estimated, and
Refunds).
And while you are right about cash basis, it is still desireable to
see the true amount of taxes paid on your income for that year.
Bill
On Mon, 1 Nov 1999 20:05:07 -0500, "Frederick Lonsdale"
scott s.
This is true. You need to subcat quarterly estimated taxes and
amount paid or received with the return. Q4 est tax is not due
until 1/15 so it must also be accounted for.
scott s.
.
Hywel Mallett
news:MPG.128827c4a...@news.kersur.net...
> In article <381db342...@news.birch.net>, bi...@birch.net says...
> > In general that is the way to do refunds. BUT NOT FOR TAXES.
> >
> > As the refund is for a prior year, but being received this year it
> > will screw up the reports of how much tax you have paid THIS YEAR.
>
> ick. yeah, you're right.
>
> > It needs to be a separate catagory (or sub-catagory).
>
> double ick, but i can't think of a better solution :(
I set up a new liability account called Tax Liability, then whatever you're
owed goes into this on the date when you're owed it (or vice versa). When
you actually receive the refund it's a transfer from the Tax Liability
account to the account it's paid into.
--
Hywel Mallett
Bill Irwin
31 of the refund year, thereby lowering my total tax expense for that year.
When I receive the funds I can process as a "Customer Payment", which pays
the invoice and deposits to chequing account on the date of receipt.
I know that this option only works for H&B users, but I wanted to throw it
out for those there are.
Bill H wrote:
> In general that is the way to do refunds. BUT NOT FOR TAXES.
>
> As the refund is for a prior year, but being received this year it
> will screw up the reports of how much tax you have paid THIS YEAR.
>
> It needs to be a separate catagory (or sub-catagory).
>
> Bill
>
> On Sun, 31 Oct 1999 21:46:07 -0500, Dan Swartzendruber
> <dsw...@druber.com> wrote:
>
> >In article <7vhurr$h1n$1...@nnrp1.deja.com>, nmon...@my-deja.com says...
> >> Hi,
> >> Can someone help me by pointing out how to enter tax refund
> >> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
> >> as I can tell, it is not supposed to be an income account, nor
> >> an expense account. But what kind of an account would it be entered
> >> into?
> >
Richard J Morris
> >> Can someone help me by pointing out how to enter tax refund
> >> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
> >> as I can tell, it is not supposed to be an income account, nor
> >> an expense account. But what kind of an account would it be entered
> >> into?
> >
> >of an expense, and should be entered into the same account you enter the
> >expense. The resulting expense balance will be the same amount as if you had
> >originally paid the correct amount of federal income and not received a
> >refund. Hope this helps.
>
> CAUTION. Taxes paid is what you report on the 1040 as W2 withholding
> or estimate tax payments. You do not want to reduce these for cash
> refunds.
--
Richard J Morris
Richard Weaver
>
>Hi,
> Can someone help me by pointing out how to enter tax refund
>(e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
>as I can tell, it is not supposed to be an income account, nor
>an expense account. But what kind of an account would it be entered
into?
A lot of responses to this question, each with a different method.
What each
response left implicit, however, was the objective of the described
method.
For this response I'll begin by describing what I want.
In general, tax payments/refunds for a specific tax year occur in
multiple
calendar years. I want to be able, using Quicken, to easily prepare a
report
for a tax year that includes all transactions related to that tax year
and
that can be matched to tax form lines.
There are a number of methods that can be used to select, or group, tax
transactions for one tax year: an account for each tax year,
categories for
each tax year, a "tag" in the memo field ("97tax" for example); but I
think
I've chosed the simplest - transaction date.
For example, if in November 1999 I get a $100 refund for my 1997
federal
tax, my Quicken entry looks like this:
12/31/97 IRS cat=fed-payorrefund memo=11/99 $100
The January 1998 4th estimated payment for 1997, $10, was entered as
12/31/97 IRS cat=fed-est-payment memo=1/98 $ 10
Thus a Quicken tax report for 1997 is trivia, just select 1997 as the date
range and whatever else you want (specific tax categories, tax related
categories (which picks up deductables), ...).
The tax categories I use are (I've added a "form-line" identification):
Category & Transfer List
11/ 3/99 - WEAVER Page 1
Taxes Expns Tax Taxes: Fed & State
Fed-est-payment Sub Tax Fed tax estimated payment
1040-58
Fed-payorrefund Sub Tax Fed tax payment or refund
1040-65 or 68
Fed-withhold Sub Tax Fed tax witheld
1040-57
State-est-pay Sub Tax Statetax estimate payment
State ...
State-payorrfnd Sub Tax Sttax pay|ref yr recorded
State ...
State-PrYr-Offs Sub Statetax pr yr p|r offset
none (not tax related!)
State-PrYr-Pay Sub Tax Statetax pr yr payment
Sch A-5
State-PrYr-Ref Sub Tax Statetax pr yr refund
1040-10 SEE WORKSHEET
State-withhold Sub Tax Statetax withheld
State ...
Still reading? Should be clear that federal tax entries are a breeze, just
enter them using a transaction date for the year affected.
State tax entries are more interesting. Lets say in 1998 we made a $10
payment on our state tax return for 1997. With our same objectives and
methods, we enter (Cal is my state):
12/31/97 Cal cat=state-payorrfnd memo=4/98 $ 10
So we get correct state reports, same breeze as with federal. But there is a
detail - that payment is a 1998 (not 1997) federal deduction. So some state
tax transactions have to be entered twice, once for the state year affected
and once for the federal year affected. In this case we would enter
4/15/98 Cal cat=state-pryr-pay memo=1997 $ 10
And now you observe that we have entered an expense twice. Not nice. That's
what the offset category is for. For a state tax payment made for other than
the current calendar year, I make three entries
12/31/97 Cal cat=state-payorrfnd memo=4/98 $ 10
4/15/98 Cal cat=state-pryr-pay memo=1997 $ 10
4/15/98 Cal cat=state-pryr-offs memo=1997 $10
So there you have it. With those three entries: state report for 1997 is
correct, federal report for 1998 is correct, and the net expense is correct.
---------- (slightly new topic)
Having been so clever, it turns out that my "prior year" categories should
really have been "other year" as the year involved might be a future year.
Suppose the standard federal deduction is $7k and you are able to itemize $8k
of deductions. You feel good -- you've beat the standard and saved some
money. But, you're only getting $1k benefit. Suppose you can move, say $4k of
deductions from one year to the next, so your itemized deductions run $3k,
$12k, $3k, $12k ... Now for the $3k years you take the standard deduction
and for the $12k years you itemize. Thus, looking at two years, you get $7 +
$12 = $19k of deductions instead of $8 + $8 = 16k.
There are lots of ways of moving deductions, lots of legal ways. For example
on the last Sunday of this year, I'll write the church a check for six months
contributions -- and donate nothing in the year 2000. On the first Sunday of
2001 I'll write another check for 6 months (the 2nd half of 2000) and
throughout 2001 make regular contributions. Thus I've doubled contributions
in alternate years. Another way of doubling is to default on property taxes,
paying them in alternate years (there is no stigma, just do the math -- if
your tax savings substantially exceed the penalties then do it; paying a 10%
fee to save on a 30% marginal tax rate is a good deal).
Something else I'll do is pay my 2000 estimated state taxes very promptly. On
the last day of this year, 1999, I'll write the state a check for my year 2000
estimated taxes. The state receives and process those year 2000 taxes in
January of the year 2000 - no problem there. And I'll deduct those year 2000
state taxes in the year I paid them - 1999, no problem there. So I've again
doubled deductions, this time state taxes, in alternate years. The Quicken
entries to be made on 12/31/99 are (assume $1000 est tax):
1/ 1'00 Cal cat=state-est-pay memo=12/31/99 $ 1000
12/31/99 Cal cat=state-pryr-pay memo=2000 $ 1000
12/31/99 Cal cat=state-pryr-offs memo=2000 $1000
And, again, you can see that state and federal reports will be correct. The
amusement, for me, is that "prior year" is really a future year.
enjoy
dick w
David Arnstein
create classes named "Tax 1998" and "Tax 1999" to begin with. Then
(for example) a state tax transaction that relates to 1998 would be
assigned to category Tax:State and class "Tax 1998."
I haven't tried this. Actually, I'm afraid to. A few questions to
consider:
1. How hard would it be to fashion reports and graphs that use the
classes?
2. Would the use of classes mess up Quicken's (and Turbo Tax's)
features that provide special handling of tax related events?
3. In general, how well to Quicken's classes work?
--
David Arnstein
arns...@netcom.com
Bill H
<rjmo...@lucent.com> wrote:
>Bill H wrote:
>>
>> On Sun, 31 Oct 1999 21:50:32 -0500, "The Z Man" <z...@hotmail.com>
>> wrote:
>>
>> >
>> ><nmon...@my-deja.com> wrote in message news:7vhurr$h1n$1...@nnrp1.deja.com...
>> >> Hi,
>> >> Can someone help me by pointing out how to enter tax refund
>> >> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
>> >> as I can tell, it is not supposed to be an income account, nor
>> >> an expense account. But what kind of an account would it be entered
>> >> into?
>> >
>> >Federal income tax is an expense. Accordingly, a tax refund is a reduction
>> >of an expense, and should be entered into the same account you enter the
>> >expense. The resulting expense balance will be the same amount as if you had
>> >originally paid the correct amount of federal income and not received a
>> >refund. Hope this helps.
>>
>> CAUTION. Taxes paid is what you report on the 1040 as W2 withholding
>> or estimate tax payments. You do not want to reduce these for cash
>> refunds.
>What if you predate to th eprevious year?
>--
>Richard J Morris
TOO problems. First you will screw up your checking account (or where
you deposit the refund). You can fake this out by entering a back
dated transact in to a "clearing" account and then entering a transfer
to the checking account on the date that you make the deposit.
The other problem is that if you have any questions about last taxes
it will be screwed up. You can get around that by using a different
catagory. I suggested make up a main FederalTax catagory and then
refunds and withholdings as sub-catagories under it.
Bill
Anthony J Gladson
Refund. I record the transaction into the refund account. BTW I have given
up the Quicken to Turbo Tax Interface. It sucks. It is quicker to enter my
information from the reports I have from Quicken.
Richard Weaver <rwe...@ix.netcom.com> wrote in message
news:7vsj1v$o30$1...@nntp6.atl.mindspring.net...
webb...@gmail.com
> Hi,
> Can someone help me by pointing out how to enter tax refund
> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
> as I can tell, it is not supposed to be an income account, nor
> an expense account. But what kind of an account would it be entered
> into?
>
webb...@gmail.com
danbrown
The problem with applying a refund into the Category originally used when the tax was withheld, is that it distorts your withholding for the current year with a refund for the prior year's taxes.
Don in San Antonio
> Hi,
> Can someone help me by pointing out how to enter tax refund
> (e.g, Annual Fed. Tax) into Quicken 2000/99/98? For as far
> as I can tell, it is not supposed to be an income account, nor
> an expense account. But what kind of an account would it be entered
> into?
>
> Thank you,
> Nima
>
>
>
> Sent via Deja.com http://www.deja.com/
> Before you buy.
scott s.
news:3e4b01d0-8a20-4591...@googlegroups.com:
use for the tax year final payment.
scott s.
.