Fwd: Re: Accounting Question: Handling Reimbursements

[David T.]

Meant to cc the list on this.

--- "David T." <sunfish62 at yahoo.com> wrote:

> Date: Sat, 30 Dec 2006 15:07:27 -0800 (PST)
> From: "David T." <sunfish62 at yahoo.com>
> Subject: Re: Accounting Question: Handling Reimbursements
> To: Robert Ramsdell <rcriii at ramsdells.net>
> 
> --- Robert Ramsdell <rcriii at ramsdells.net> wrote:
> > 
> > On Sat, 2006-12-30 at 11:52 -0800, David T. wrote:
> > 
> > > Assets: Income 
> > 
> > Shouldn't this be Income:Salary?  Then money flows from this into FSA
> > and Checking.
> > 
> 
> It is Income: Salary. I just misspoke.
> 
> > > The problem here is that, from a tax-accounting perspective, the credit
> > should
> > > first be applied to Expenses: Medical so that the Year-End amount
> reflects
> > my
> > > actual out-of-pocket medical expenses, and my tax returns are accurate. I
> > am
> > > sure there is a simple fix for this, but I can't for the life of me
> figure
> > out
> > > how I can get the one FSA payment to simultaneously increase my checking
> > > account and decrease my expense account balances. 
> > 
> > You can't.  You are out of pocket for the medical expenses regardless.
> > The FSA is just you reimbursing yourself.
> > 
> > I suppose you could create a new expense account medical-reimbursed, and
> > each time you have a flex reimbursement add to the split an equivalent
> > transfer from expenses:medical to expenses:medical-reimbursed.  Then at
> > the end of the year expenses:medical-reimbursed will be equal to the
> > flex sum, while expenses:medical is equal to the balance.
> 
> I see what you mean about reimbursing yourself. But that leaves the question
> about how to handle the taxes documentation. I'd like to have a principled
> method for tracking and reporting this, and I'm not sure that I see how the
> reimbursed account would work. If I transfer $100 from FSA funds to this
> reimbursed account, then I'd still have to create 2 $100 transfers out--one
> to
> the checking account and one to the Medical expense account--and the account
> will be out of whack. 
> 
> Although I guess it'd be out of whack by the amount paid by the FSA, and
> maybe
> that's not important? hmmmm.... Maybe the thing to do would be to set up the
> account at the beginning of the year with a positive balance in the amount of
> the FSA designation (for non-US users, you have to decide in advance how much
> to put into your FSA and use it all by year-end, or you lose it). Then I
> could
> monitor the progress toward full expenditure. Or am I way over-thinking this?
> 
> > 
> > > 
> > > BTW, my wife tells me just to subtract the FSA total from the Medical
> total
> > at
> > > the end of the year and use that on the tax forms, which will work, but
> is
> > > nowhere near what I imagine GAAP requires...
> > 
> > This is what I do.  But I don't aspire to complying with GAAP.
> > 
> > Robert
> > 
> > 
> 
> 
> __________________________________________________
> Do You Yahoo!?
> Tired of spam?  Yahoo! Mail has the best spam protection around 
> http://mail.yahoo.com 
> 


__________________________________________________
Do You Yahoo!?
Tired of spam?  Yahoo! Mail has the best spam protection around 
http://mail.yahoo.com