categorizing a tax refund

Hi Everyone,

I'm running Microsoft Money 2004 Deluxe Version 12.0 Update 1.

I'd like to know how to properly categorize my annual payroll tax refund.
I'm guessing it should be entered as I would any regular payment deducted
from my wages, but as a negative number. However I'm not sure how this would
affect Money's tracking of amounts within the tax year, or if this really
matters. I'll appreciate any light shed on this subject. Thanks,
.......................Dave

Chris
Mon Jan 02 21:56:54 CST 2006

"Dave" <p_sellars@hotmail.com> wrote in message
news:OAaeBhBEGHA.2704@TK2MSFTNGP15.phx.gbl...
> Hi Everyone,
>
> I'm running Microsoft Money 2004 Deluxe Version 12.0 Update 1.
>
> I'd like to know how to properly categorize my annual payroll tax refund.
> I'm guessing it should be entered as I would any regular payment deducted
> from my wages, but as a negative number. However I'm not sure how this
> would affect Money's tracking of amounts within the tax year, or if this
> really matters. I'll appreciate any light shed on this subject.

My method: create an account called FIT payment/refund. Create a transaction
dated 12/31/05 increasing the balance of the account by the amount of the
refund. Categorize it as income tax expense. It will be a negative expense
and Money will complain, but say OK. When you get your refund, record the
deposit as a transfer from FIT payment/refund.

This method keeps the net tax correct relative to the tax year, and avoids
recording the refund as income, which it is not.

Others will have different approaches.
--
Chris Cowles
Gainesville, FL

Dave
Tue Jan 03 19:25:40 CST 2006


"Chris Cowles" <NoSpam@For.me> wrote
> My method: create an account called FIT payment/refund. Create a
> transaction dated 12/31/05 increasing the balance of the account by the
> amount of the refund. Categorize it as income tax expense. It will be a
> negative expense and Money will complain, but say OK. When you get your
> refund, record the deposit as a transfer from FIT payment/refund.
>
> This method keeps the net tax correct relative to the tax year, and avoids
> recording the refund as income, which it is not.
>
> Others will have different approaches.
> --
> Chris Cowles
> Gainesville, FL
>
Thanks, I'll try it that way ..................Dave

Dave
Tue Jan 03 21:18:36 CST 2006


I've tried something a little different first:
After backing up, I went back over the last few years federal tax refund
deposits and re-categorized them as suggested, but maintained them as
checking account deposits rather than in a new account. As expected Money
asked if I wished to categorize the deposit as an expense (yes). Money also
asked which tax year they should be assigned to, taking care of that
concern. But when I did the same for state tax refund deposits Money didn't
prompt for a tax year association. I don't know how to check this, and I
have to assume Money didn't properly handle this untill I know otherwise. I
suppose I can just change the state tax refund deposit transaction dates to
Dec 31 of the proper years as previously suggested. These are small items
and shouldn't skew any reports or statistics much at all. Happy New Year,
..............Dave

Chris
Tue Jan 03 21:34:56 CST 2006

"Dave" <p_sellars@hotmail.com> wrote in message
news:uk26O2NEGHA.2424@TK2MSFTNGP10.phx.gbl...
>
> Money also asked which tax year they should be assigned to, taking care of
> that concern. But when I did the same for state tax refund deposits Money
> didn't prompt for a tax year association.

That appears to be a new function, or maybe I just never used it. If you go
to the category and right-click a transaction, there's an option to
associate it with a tax year manually. There does not appear to be a
corresponding function for state taxes. You'll have to backdate the
transaction to the proper tax year if you want it to report correctly.

--
Chris Cowles
Gainesville, FL

Dick
Tue Jan 03 22:23:34 CST 2006

Wow. Another little known "feature" surfaces in the newsgroup. It's even in
M04.

This is so oddball--it's a relatively unique place where Money does
something absolutely category specific on entry of data and it's another
place where Money collects some metadata that gets absolutely lost in the
application. (Presumably Tax Estimator and maybe the tax reports now about
this. But why isn't it something exposed to the user for any transaction
regardless of category? Sure, it only makes sense for some transactions. But
the hallmark of most other MS apps is that they generalize and abstract
solutions rather than add all of these narrow and closed obscure hacks.) So
there's some code looking at every transaction entered to see if this
question applies? No wonder the thing is such a pig. I wonder how many other
places this kind of crap is done?

"Dave" <p_sellars@hotmail.com> wrote in message
news:uk26O2NEGHA.2424@TK2MSFTNGP10.phx.gbl...
>
> I've tried something a little different first:
> After backing up, I went back over the last few years federal tax refund
> deposits and re-categorized them as suggested, but maintained them as
> checking account deposits rather than in a new account. As expected Money
> asked if I wished to categorize the deposit as an expense (yes). Money
> also asked which tax year they should be assigned to, taking care of that
> concern. But when I did the same for state tax refund deposits Money
> didn't prompt for a tax year association. I don't know how to check this,
> and I have to assume Money didn't properly handle this untill I know
> otherwise. I suppose I can just change the state tax refund deposit
> transaction dates to Dec 31 of the proper years as previously suggested.
> These are small items and shouldn't skew any reports or statistics much at
> all. Happy New Year, ..............Dave
>

Dick
Tue Jan 03 22:30:47 CST 2006

Curiously enough, this only plays for the Expense Category Taxes:Federal
Income Tax and plays whether the amount being recorded is income or expense.
Contrast this with the treatment of Other Income:Federal Tax Refund where
there is no question and the presence of Taxes:Federal Income Tax and
Taxes:Federal Income Tax-Previous year. At least I think these were,
somewhere along the way, standard categories supplied by Money. The standard
list shrank radically in M05 so they may no longer be there.