Setting up a Flexible Spending Account (FSA)

[Ross Boylan]

On Tue, 2013-02-12 at 17:41 -0500, makai wrote:
> Hi,
> 
> Seting up an FSA in GnuCash boggles my mind.  I have these accounts created:
> 
> Asset:CurrentAccounts:Checking
> Asset:CurrentAccounts:FSA
> Expense:Doctor
> Income:Salary
> Liability:FSA
> 
> The liability can be reduced monthly via a split from my salary.  That makes
> sense because I've basically loaned the money to myself and I pay back the
> loan over time.
I've taken a simpler approach that does not track which expenses have
yet to be reimbursed or the maximum available annual benefit (so maybe
it's not simpler, since I'm trying to develop a system for that...).
I'm using Managing Your Money, but the same principles should apply.  I
treat the FSA account as essentially another checking account.

I don't have a Liability:FSA account.

If you get $100 in income, of which $20 goes to the FSA that is
Income:Salary 100
Asset:Checking 80
Asset:FSA      20

When you pay a doctor you incur the medical expense
Asset:Checking -50
Expense:Doctor  50

When you get reimbursed from the FSA
Asset:Checking 50
Asset:FSA     -50

If you fail to exhaust the benefit at the end of the year:
Asset:FSA 800
Expenses:Unused FSA 800

In this approach the FSA balance could go negative for awhile if you use
up more of your annual benefit than you have paid in.

Ross
> 
> But there are two transactions which I don't understand: incurring an
> expense and receiving a reimbursement from the FSA.  This thread got me
> half-way there, but doesn't answer the question about how track the
> reimbursement.
> http://lists.gnucash.org/pipermail/gnucash-user/2009-January/027937.html
> 
> When I incur eligible medical expenses, I would like to transfer them from
> Checking to some sort of receivable account.  This will remind me I have
> receipts I need to send in (in the same way as do my reimbursable work
> expenses; and the similarity of this situation to reimbursable business
> expenses is confusing me badly).  Then, when I get reimbursed for the
> expenses the money has to end up in a medical expense account, like Doctor,
> because at the end of the day, I'm paying out the money.
> 
> Loaning myself the money (funding the FSA at the start of the term)
> Liability:FSA -> Asset:CurrentAccounts:FSA
> 
> Paying off the loan (monthy)
> Income:Salary -> Liability:FSA
> 
> Incurring an expense
> Checking -> 
> 
> Receiving a reimbursement
> Expense:Doctor -> 
> 
> How do I set up the tree of accounts, and what would the transfers be?
> 
> -Makai
> 
> 
> 
> |\/| /\ |< /\ |
> 
> makai at digiplasty.com | skype: makai.smith | cell: +1 610 812 9463
> 
> 
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