Managing U.S. Flexible Spending Accounts

David T. sunfish62 at yahoo.com
Mon Jan 4 19:37:02 EST 2010


One further point to consider:

The two main types of FSAs (Dependent Care and Health Care) have different ways of handling the sum of money. The Medical FSA allots the entire amount you designate from the first day of the year, and as such should have a transaction using the Liability account. You owe the FSA the full amount from day one, and pay it back at each paycheck. The Dependent Care FSA, on the other hand, only pays out as you accrue payments in.

It really gets messy when you start trying to manage unreimbursed payments with FSA-paid ones AND insurance-reimbursed ones--all of which are intermingled because the FSA administrator is the same as the Insurance company. Especially since the company will deny a charge on insurance and automatically make a payment from the FSA without indicating particularly clearly what is going on...

David

--- On Mon, 1/4/10, brad <bradhaack at yahoo.com> wrote:

> From: brad <bradhaack at yahoo.com>
> Subject: Re: Managing U.S. Flexible Spending Accounts
> To: "Fred Frigerio" <frigerio at bellsouth.net>
> Cc: gnucash-user at gnucash.org, "Thomas Scofield" <scofield at calvin.edu>
> Date: Monday, January 4, 2010, 1:35 PM
> In addition to what Fred said
> ...  
> I wouldn't put a transaction for the yrs allotment. 
> For every paycheck
> you put some in the Asset:FSA
> account.   When you get reimbursed for an
> expense there would be a transaction which would reduce the
> balance in
> the Asset:FSA account and also increase the balance in your
> bank
> account.  So I don't think you need expenses:FLEX, or
> liabilities:FSA,
> and replace equity:FSA with asset:FSA.   
> 
> Of course if you get to the deadline and lose the money
> because you
> didn't spend enuf, then you would need to expense it
> somehow. Stupid
> system ...
> 
> 
> On Mon, 2010-01-04 at 15:55 -0500, Fred Frigerio wrote:
> > I would probably have an Asset:FSA only. Then divert
> money into it from
> > either a Paycheck Split or from a different Asset
> account (Money Market,
> > Checking, etc) as you make deposits into it. The only
> use a regular person
> > would have for the Equity account would be when
> closing the year to 'move'
> > the difference between Income and Liabilities accounts
> to zero them out.
> > 
> > Fred Frigerio
> > 
> > 
> > 
> > On Mon, Jan 4, 2010 at 2:51 PM, Thomas Scofield <scofield at calvin.edu>
> wrote:
> > 
> > >
> > > I am a new user of GnuCash, and someone who has
> not had an accounting
> > > course of any kind.  (On the other hand, I
> am a mathematician, and the
> > > basics of double-entry accounting seem fairly
> intuitive if I can ever get
> > > the principle behind the labels "credit" and
> "debit".)  I have searched the
> > > archives for advice about setting up flexible
> spending accounts, and have
> > > only come across the post by John R. Carter on
> Jan. 5, 2009.  It is with
> > > that post in mind I am posing my question.
> > >
> > > I have created accounts
> > >  Liabilities:FSA
> > >  Equity:FSA
> > > after which I entered a transaction in
> Liabilities:FSA placing my year's
> > > allotment in the "Increase" column.  (The
> transfer account is Equity:FSA,
> > > where now the same amount appears in the
> "Decrease" column.)
> > >
> > > I am now at the point of entering a
> paycheck.  I placed the full amount in
> > > the "Income" column of a an "Income:Salary"
> transaction, and split the
> > > transfer account.  It is split many ways, as
> I am sending some to several
> > > different bank accounts, some to a
> "Expenses:social security" account, some
> > > to "Expenses:medicare", etc.  One of the
> accounts in the transfer split is
> > > "Expenses:FLEX".  Now, if I follow the
> advice of Mr. Carter, an entry in
> > > "Expenses:FLEX" would have its "double" appear in
> "Equity:FSA", decreasing
> > > the amount there from the initial FLEX
> allotment.  That makes sense to me,
> > > but it also makes sense that I should have it
> mirror what came out of my
> > > paycheck, and you (of course) cannot do
> both.  Any suggestions as to a
> > > sensible approach?
> > >
> > > Thomas L. Scofield
> > >
> --------------------------------------------------------
> > > Associate Professor
> > > Department of Mathematics and Statistics
> > > Calvin College
> > >
> --------------------------------------------------------
> > >
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