Some questions about tracking personal finances

[Chris Good]

> Message: 2
> Date: Wed, 4 Jan 2017 23:30:03 +0500
> From: "David T." <sunfish62 at yahoo.com>
> To: replicon <replicon at gmail.com>
> Cc: gnucash-user at gnucash.org
> Subject: Re: Some questions about tracking personal finances
> Message-ID: <868A9364-61E2-44F0-B90B-B19BA4C689B4 at yahoo.com>
> Content-Type: text/plain; charset=utf-8
> 
> Replicon,
> 
> This is a lot to ask; I?ll weigh in on what I can. Note: IANAA. These are
my
> personal ideas.
> 
> 1) The Tax-Related aspect of GnuCash is cumbersome to set up, but once it
is
> set up, works rather nicely for a US tax summary?for me at least. To
attach an
> account to a particular tax line, open the Tax Report Options dialog,
locate
> the account which you want to include, identify the tax line it pertains
to
> (e.g., W-2 Wages, Self) and save. Note that you have to do this process
one
> account at a time. The only exception: if you have multiple accounts that
you
> want to assign to the same tax line, you can select them all and assign
them
> at once. This is why it is cumbersome to set up. Once they are set up, you
can
> run the TXF report and get a tax summary.
> 
> 2) Pre-tax lines can complicate things, since they affect the total
earnings
> line. You can try to split your payroll income into Taxed and Untaxed, but
my
> experience is that pay stubs don?t give you that total pretax number,
forcing
> you to figure out which lines are pretax, add them up, enter this pretax
> figure, and then deduct that from the earnings total. It?s not rocket
science,
> but it can be a hassle!
> 
> 3) I find it best to have separate expense accounts for anything I either
plan
> to receive a tax statement on (e.g., brokerage dividend statements), or
want
> to enter on a particular line (e.g., Expenses:Business:Equipment). Then, I
> assign these accounts to particular tax lines.
> 
> Skipping 4 & 5 & 6.
> 
> 7) I have Expenses:Charity, which I attach to the appropriate tax line.
They
> aren?t negative income; they are deductible expenses, however.
> 
> 8) You write off goods at a different (IRS-defined) value. Personally, I
use an
> online service (ItsDeductible) to enter donation descriptions, which
provides
> me with a deduction value based on typical assessments. I imagine you
could
> write a spreadsheet to do the same. Note that I am not using GnuCash for
> this.
> 
> 9) Income:Other Income -> Assets:Cash (if you really need to put it in)
> 
> 10) I?d list it as Income:Other Income->Assets:Cash, but I imagine there
are
> more principled, accountantly ways of handling this.
> 
> HTH,
> David
> 
> > On Jan 4, 2017, at 9:17 PM, replicon <replicon at gmail.com> wrote:
> >
> > Hi all,
> >
> > So, I've had such a good time setting up my biz stuff with gnucash
> > that I've decided to use it starting this year to track all my money
> > and where it goes.
> >
> > It's pretty easy to set it up for my personal tracking, but I want to
> > do it 'correctly', such that in addition to that, if I choose to do my
> > taxes with an accountant next year, rather than TurboTax, I can
> > generate a bunch of reports, hand them over, and expect them to be
> correct.
> >
> >
> > So, while going through my various stuff, I've come up with some
> > relevant questions that I hope someone can answer. If this is not good
> > form for this list, I'm happy to break these up into separate posts...
> >
> >
> >
> > 1) "Tax-Related" Accounts: It looks like you can set tax options
> > (through some workflow other than that checkbox), but the manual
> > doesn't really give that section a proper introduction. Is this
> > something I should worry about, or something I can configure later
> > without having to go back in and move everything around?
> >
> > 2) If I look at my paystub, it's got a breakdown of where things are
going.
> > Some of them are pre-tax (e.g. 401k, benefits
> > (dental/vision/medical)), and some are just taxes. Taxes are easy,
> > just transfer to expense:Tax subaccounts, but is there any best
> > practice for the pre-tax stuff? Is that just generic expenses?
> >
> > 3) Itemization - so far, I've always gone with the default deduction,
> > but for all I know, this might change. What are some best practices to
> > help make that decision? I assume a "sales tax" account under
> > Expense:Tax is one, but are there any others? I know very little about
this
> stuff.
> >
> > 4) RSUs: I get restricted stock units on a vesting schedule, and part
> > of them are always sold to account for income tax. How do you guys model
> this?
> > Two transactions, one to receive the RSU (transfer: Income), and one
> > to auto-sell the tax portion (transfer: Expense:Tax:Income:RSU or
> something)?
> >
> > 5) 401k: Any special considerations? I was thinking of doing something
> > like
> > this:
> > https://lists.gnucash.org/pipermail/gnucash-user/2003-January/005402.h
> > tml - fairly simple, though the transactions are just adjustments to
> > the total, for calculating net worth. This kind of goes back to the
> > "pre-tax" question as well.
> >
> > 6) Home: I paid off the condo I live in a while ago. I assume this is
> > now just an asset with... whatever zillow tells me the place is worth?
> > Or should it be "what I bought it for" (price + closing costs)?
> >
> > 7) Charitable Donations 1: When I give to charities, and get a tax
> > receipt, how should I model that? I get the sense that such "tax
> > writeoff" type things just need to be "negative income", since that's
> > my understanding of how it's done at tax time.
> >
> > 8) Charitable Donations 2: Does the above apply for the case where I
> > give existing items (e.g. clothes), and I get a blank receipt on which
> > to write what I think those clothes were worth?
> >
> > 9) Finding extra unaccounted-for cash: Let's say I find a $100 bill in
> > my couch in a few months. Does that "Cash" transaction just balance
> > against a new "opening balance"? I can't imagine it's "income", since
> > it's already mine, so it's like... "an opening balance I wasn't aware
> > of until now" :-)
> >
> > 10) Selling personal items: Same kind of question as above. If I hold
> > a garage sale, and sell a bunch of things I own at a steep discount,
> > is that considered "income"? I'd be more inclined to think of it
> > similarly to "finding a $100 bill in my couch", since I'm just selling
> > stuff I bought a long time ago at some un-calculable loss.
> >
> >
> >
> > Thanks for taking the time! I really appreciate this, this list has
> > been so valuable to me!
> >
> > Happy New Year!
> >
> >
> >
> >
> > --
> > View this message in context:
> > http://gnucash.1415818.n4.nabble.com/Some-questions-about-tracking-
> per
> > sonal-finances-tp4688599.html Sent from the GnuCash - User mailing
> > list archive at Nabble.com.

Hi Replicon,

Re 6,

John Ralls suggested a nice way of handling the value of your personal
residence by using a commodity and updating its value using the price
editor.
See John's first response in
http://gnucash.1415818.n4.nabble.com/RE-Capital-Gains-Documentation-tc468820
6.html

Regards, Chris Good
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