handling nondeductible expenses

[nol...@gmail.com]

Hi,

I've started using beancount before this summer; some months ago I started a freelance activity and decided (maybe wrongly) to setup a different beancount file only for my professional income and expenses.

I'm now trying to extract some meaningful information form my ledger in order to confront with my accountant.

I would like to use fava balance sheet as starting point, using Equity:Earnings:Current and them moving his balance to something else on 2018;  but here comes some of my problems:

* when I pay myself a salary it's recorder on account Expenses:Salary so will be removed from Equity:Earnings:Current

* there are some expenses that are nondeductible (or only partially deductible), this expenses will in any case be subtracted from Equity:Earnings:Current

I think that all this problems originated from my setup, and lack of understanding about accounting concepts, so if someone can help me now before it will be too late :D 

[Justus Pendleton]

On Monday, December 11, 2017 at 11:45:47 PM UTC+7, nol...@gmail.com wrote:

I would like to use fava balance sheet as starting point, using Equity:Earnings:Current and them moving his balance to something else on 2018

Why Equity? It seems like this should be Income that increases an Asset.

2000-01-01 "Client paid me"

  Asset:Business-Account 100 USD

  Income:Sales

* when I pay myself a salary it's recorder on account Expenses:Salary so will be removed from Equity:Earnings:Current

I don't see the problem here, other than I think you should be using an Asset instead of Equity.

 

* there are some expenses that are nondeductible (or only partially deductible), this expenses will in any case be subtracted from Equity:Earnings:Current

Same thing. I don't see the problem here? The money has to come from somewhere. Whether it is deductible or non-deductible or partially deductible it will always come from the same place. (Though it should be an Asset instead of Equity.) 

[nol...@gmail.com]

Thank you for your reply.

On Friday, December 15, 2017 at 4:49:29 AM UTC+1, Justus Pendleton wrote:

On Monday, December 11, 2017 at 11:45:47 PM UTC+7, nol...@gmail.com wrote:

I would like to use fava balance sheet as starting point, using Equity:Earnings:Current and them moving his balance to something else on 2018

Why Equity? It seems like this should be Income that increases an Asset.

I think I didn't explained myself properly. I'll post a complete example at the end.

 

[ ... ]

* when I pay myself a salary it's recorder on account Expenses:Salary so will be removed from Equity:Earnings:Current

I don't see the problem here, other than I think you should be using an Asset instead of Equity.

I'm using Equity:Salary because I'm tracking it as an asset in my personal beancount file. Here I have to track that moneys come out from bank account but are no longer tracked here, and must not change Equity:Earnings:Current  

 

* there are some expenses that are nondeductible (or only partially deductible), this expenses will in any case be subtracted from Equity:Earnings:Current

Same thing. I don't see the problem here? The money has to come from somewhere. Whether it is deductible or non-deductible or partially deductible it will always come from the same place. (Though it should be an Asset instead of Equity.) 

I created an example ledger, hoping it will help.

;; -*- mode: beancount; -*-

2016-12-01 open Assets:Bank EUR

2016-12-01 open Assets:AccountReceivable EUR

2016-12-01 open Income:Customer1 EUR

2016-12-01 open Expenses:Personal EUR

2016-12-01 open Expenses:Utilities EUR

2016-12-01 open Equity:Salary EUR

2016-12-01 * "Customer1" "Invoice 2016-1" ^invoice2016-1

  Assets:AccountReceivable 1000 EUR

  Income:Customer1

2016-12-15 * "Customer1" "invoice 2016-1" ^invoice2016-1

  Assets:Bank 1000 EUR

  Assets:AccountReceivable

  

2017-12-01 * "Customer1" "Invoice 2017-1" ^invoice2017-1

  Assets:AccountReceivable 1000 EUR

  Income:Customer1

2017-12-15 * "Customer1" "invoice 2017-1" ^invoice2017-1

  Assets:Bank 1000 EUR

  Assets:AccountReceivable

2017-12-16 * "Caffè"

  Expenses:Personal 1 EUR

  Assets:Bank

2017-12-17 * "TheInternet" "internet bill december"

  Expenses:Utilities 20 EUR ; 50% deductible

  Assets:Bank

2017-12-20 * "Salary"

  Assets:Bank      -500 EUR

  Equity:Salary

2017-12-31 query "2017" "

SELECT sum(position) as earnings

FROM year = 2017 OPEN ON 2017-01-01  CLOSE ON 2018-01-01 CLEAR

WHERE account = 'Equity:Earnings:Current'

"

This is a simplified example that I hope may be useful for explaining my doubts.

If I run the last query:

$ bean-query example.beancount "run '2017 all'"

earnings

--------

-979 EUR

This output is correct but it's not what I need, I would like to get the same concept as Equity:Earnings:Current but without Expenses:Personal and with only half of Expenses:Utilities (50% deductible)

 

[Justus Pendleton]

On Sunday, December 17, 2017 at 9:51:01 PM UTC+7, nol...@gmail.com wrote:

I'm using Equity:Salary because I'm tracking it as an asset in my personal beancount file. Here I have to track that moneys come out from bank account but are no longer tracked here, and must not change Equity:Earnings:Current  

I admit I don't understand your set up at all. I don't see any way that paying salary to someone becomes Equity in a company. In any case, your real question seems to be.....

I would like to get the same concept as Equity:Earnings:Current but without Expenses:Personal and with only half of Expenses:Utilities (50% deductible)

I don't think beancount is really designed for "half of an account" type of calculations. You'll need to either export to Excel or write some python, I reckon.

[nol...@gmail.com]

On Monday, December 18, 2017 at 5:40:25 AM UTC+1, Justus Pendleton wrote:

On Sunday, December 17, 2017 at 9:51:01 PM UTC+7, nol...@gmail.com wrote:

I'm using Equity:Salary because I'm tracking it as an asset in my personal beancount file. Here I have to track that moneys come out from bank account but are no longer tracked here, and must not change Equity:Earnings:Current  

I admit I don't understand your set up at all. I don't see any way that paying salary to someone becomes Equity in a company. In any case, your real question seems to be.....

It's not a company, it's freelancing. It's just a VAT position my own name, that's why paying salary to myself (moving money to my family bank account) must not affect earnings.

I agree with you that if it was a company the salary should have been filled under Expenses:Salary, but that's not the case

 

I would like to get the same concept as Equity:Earnings:Current but without Expenses:Personal and with only half of Expenses:Utilities (50% deductible)

I don't think beancount is really designed for "half of an account" type of calculations. You'll need to either export to Excel or write some python, I reckon.

I tried to perform the half calculation manually using 2 separate accounts

2017-12-17 * "TheInternet" "internet bill december"

  Expenses:Utilities                               10 EUR

  Expenses:Utilities:Nondeductibles     10 EUR 

  Assets:Bank

But I still lack a way of filtering `not account ~ '^Expenses:.*:Nondeductible$'` out of my query