Sales Taxes & Budget

Lincoln A Baxter lincoln.a.baxter at gmail.com
Sun Dec 9 18:27:34 EST 2012


On Sun, 2012-12-09 at 16:56 -0600, Phil Davis wrote:
> Thanks, but that is exactly what I am trying to avoid...
> 
> Basically, I want to set up a bunch of jars and put my pay check in the
> jars... $50 for clothing, 100 for food, etc... when I am done, I have my
> budget... I only have so much in each jar (budget) and that money has to go
> to all expenses for that category... to include tax... I don't have a jar
> for tax... it is not a budget item.
> 
> Phil

OK... here is another way to do it:

Create an Asset account for each of the items you are budgeting for.
Transfer the budgeted amount to the asset account (it should probably be
a sub-account of the account your paycheck is deposited into (typically
your checking account).  

With each paycheck (after its deposit), transfer the budgetted amount to
the appropriate sub-account.  When you buy something in that category,
and pay with checking (or debit card), transfer the amount of the
purchase to the account from which you made the payment to the expense
account, and transfer the same amount from the budget account back to
the original account from which you can then use it to pay the Card
Account (account if that is how you paid), or your Wallet, if you paid
in cash.   In the cash from wallet scenario... remember, in Gnucash all
you are really doing is modeling money flow... here is how I would do
it:  Transfer the purchase amount, from the subaccount back to the
checking account, and transfer the amount of the purchase from "Cash in
Wallet", to the expense account.  You can then replenish your wallet
from the checking account account.

Essentially all this is really doing is taking money our of the general
funding account until you spend it, and then putting it back so you
transfer it to the account where you actually made the purchase (like
when you pay your credit card bill).  If you are doing this, you will
have at least 2 or 3 more transfers to do, with each purchase or
expense.  It is tedious, so you really have to want to do it.  But you
can if you really want, (as I have just shown) model the "money jars"
you say you want with Gnucash.

Lincoln


> 
> On Sun, Dec 9, 2012 at 12:00 PM, jcard21 xxxxxxx
> <jcard21+gnucash at gmail.com>wrote:
> 
> > On Sat, Dec 8, 2012 at 11:08 PM, Phil Davis <phil at coolbluedesigns.com>
> > wrote:
> > > Hello everyone,
> > >
> > > I am new to GnuCash, so thanks to everyone that has created this program.
> > > It seems to be exactly what I need.
> > >
> > >
> > > So, I am trying to figure out how I can do something, that seems a little
> > > unorthodox:
> > >
> > >     I need to keep track of both budget items and sales taxes.
> > >
> > > So, let me explain:
> > >
> > > First, I need to create and stick to a budget.  You know, a typical
> > budget
> > > for household items, groceries, mortgage, etc... the normal items that
> > > people typically create a budget for.
> > >
> > > Second, since I live in Texas, we do not have Income Tax.  Since the
> > > Federal Government allows me to deduct Sales Tax on Schedule A, I need to
> > > keep track of my sales tax.
> > >
> > > The conflict arises in the fact that I don't want a budget for sales
> > tax...
> > > I create a budget for clothing or groceries or whatever, I don't have
> > set a
> > > plan to spend $15 in taxes this week... I have a plan to spend $50 on
> > > clothing, but the government takes some of my money (tax), so I really
> > only
> > > have 45.45 to spend on clothes (45.45 + 10% sales tax (4.55) = 50.00
> > > (assuming 10% sales tax, in reality, it is 8.25% most places,
> > occasionally
> > > only 6.25% depending on the location).  However, I still want to budget
> > 50
> > > for clothing and then indicate that I spent $50 in clothing of which 4.55
> > > was sales tax.
> > >
> > > The closest I can think of is to create a sub-account for sales tax for
> > > each expense account, but that would be painful to set up and very
> > painful
> > > to create a report (or so I think at this point... remember I am new to
> > > GnuCash)
> > >
> > > Alternatively, I can create an account for sales tax, and then only
> > budget
> > > 45.45 in clothing... but I really don't want to keep track of it that
> > > way.... what if I find a deal where my sales tax is only 6.25% (instead
> > of
> > > 8.25%)?  That means I have a little extra to spend.
> > >
> > > What I really want is to indicate 50 was spent on clothing, 4.55 of that
> > 50
> > > was attributed to sales tax. Then, I could check my actual expenses vs
> > the
> > > budget and keep track of the sales tax so I can report that on my taxes.
> > >
> > > Is there any way to do this? or is there a better way?
> > >
> > > Thanks,
> > >
> > > Phil
> > > _______________________________________________
> > > gnucash-user mailing list
> > > gnucash-user at gnucash.org
> > > https://lists.gnucash.org/mailman/listinfo/gnucash-user
> > > -----
> > > Please remember to CC this list on all your replies.
> > > You can do this by using Reply-To-List or Reply-All.
> >
> > Phil,
> >
> > You spent $45.xx on clothing; you spent $4.xx on sales tax; for a
> > total of $50.00.
> >
> > • Expense:Clothing $45.xx
> >
> > You did NOT spend $50.00 on clothing.
> >
> > The $45.xx will go in the Expense:Clothing account.
> > The $4.xx will be divided between:
> >
> > • Expense:Taxes:__ Sales Tax (specify the state name)
> > • Expense:Taxes:__ Sales Tax (specify the county name)
> > • Exp3ense:Taxes:__ Sales Tax (specify the local name)
> >
> > In my situation, I pay State and County sales tax (no local), so I
> > split the sales tax between State and County, according to the
> > appropriate percentages.
> >
> > I hope this helps.
> >
> > PS: For budgeting, leave the sales tax Budget amounts zero.
> >
> > --
> > jcard21
> >
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