How handle rebates?

Set up a category called School or College classes and post your expenses to this account.

It depends. I would ask your HR department whether or not the company considers this an employee benefit or not. If they are ask them if they will be including it on your W-2 at the end of the year as income.

If it is Income then you want to create a different category, such as "School Reimbursement" with an Income type. This lets you track the Reimburesements separate from any other misc income you might receive.

If the reimbursements are not Income then you could still create a separate category called "School Reimbursement" as an expense account. Then run reports on School expense + School Reimbursement and you can see the 2 separately. Or you could use Classes of Expense and Reimbursement to distinquish the sources of the transactions.

On Sat 25 Jun 2005 05:31:29p, wrote in news: snipped-for-privacy@4ax.com:

I would suggest creating an account with type: Asset. You can have just one account for all reimbursable expenses and rebates of this type like I do. I call mine Receivable... or you can create a separate one just for education and call it maybe Education. I use mine for rebates, etc.

Enter each of your expenses as an increase to your Receivable (or Education) balance. When your employer re-imburses you, enter this as a decrease to your Receivable (or Education) balance.

The "right" way? - depends on who you ask! My favorite method is .... Set up a category under expenses called EDUCATION Under Education set up two (2) sub-categories One called EDUCATION EXPENSES and one called REIMBURSEMENTS Record the reimbursement check as a deposit using the expense sub-category of Reimbursements.

Jim M

You have received a bunch of answers. All that I have seen thus far are correct. It is really a matter of personal preference. I would set up an Income category for the reimbursements I like that method better than decreasing Education Expense because you can see both the gross amount you paid, and the reimbursement. The issue arises with other rebates, such as rebates on computer equipment (CompUSA, Best Buy, and others have these all the time). I record these deposits as Rebate Income, but reducing Computer Equipment Expense is not incorrect.

It sure is correct. If I buy, for example, a $100 computer accessory at CompUSA ... but at the time I buy it I know of a $20 manufacturer rebate isn't the Computer Equipment Cost $80 (when I receive the rebate)? Who's kidding whom here?

But, I believe, the most valid response is the one that asked HOW your Payroll dept is handling the reimbursement that they're paying. If THEY are treating it as taxable income, and reporting it a year-end on your W-2, YOU should report it as taxable income also. Who's kidding whom?

It definitely "depends". You'll have to ask your manager or HR whether or not it will be income. As part of my separation package from IBM, I was given up to $2000 in tuition reimbursements for "re-training". The reimbursements were added to my W2 income for the next year's taxes...

wrote

Use an expense category.

Use an income category. It IS income! Whether it's taxable or not is up in the air.

BTW, your expense may be deductible in one or more classifications. Yes, I realize that the expense and the income may total to zero.

First of all, with all your success writing hit novels, I'm surprised that you would spend time with us here. It is therefore not surprising that you correctly phrased "who's kidding whom" rather than saying "who's kidding who" as most folks would say. Now for my response...the true cost of the computer equipment is surely the net of the amount initially expended and the rebates received. I track the rebates separately because I am interested in highlighting how much I receive in rebates each year.

Properly posting or tracking rebates on purchases is a whole lot different than getting reimbursed by your company for tuition. Purchase rebates will never be reported to the IRS as income. Tuition can be. In fact in most cases it is considered an employee benefit and is taxable income. And they tax it at the lump sum 25% rate.

It won't equal zero as they are required to withhold taxes at the usual 25% tax rate.

Maybe you're making this too hard. Pay your tuition with a check without respect to the anticipated reimbursement. If and when the company reimburses you, they will do it by extra money in your paycheck and they will take taxes out of it just as they always do. If they decide to not reimburse you, there is nothing more for you to do in terms of canceling entries in your books.

BTW, that actually happened to me. After I was enrolled in a course, the company decided it wasn't relevant to their business and didn't reimburse me.

"Laura" wrote

It only won't if the employer does not reimburse 100%.

That's irrelevant. We're talking gross figures, not net ones. The OP's GROSS is what's reported as income, not his net. Are you incorrectly entering your net pay into Q? Or are you properly entering your gross minus your withholdings in a split?

You may not know exactly what it cost, depending upon how the tax reporting works. If your company W2's your reimbursement, then it's taxable income. However, your school expenses are tax-deductible expenses, if the education is related to furthering your career. It will blend to some extent, but it may be difficult to figure out the exact net cost after all taxes.

Yes! I have gotten some great advice! Thanks to all!

I kind of like Jim's advice abt setting up a separate asset account for ALL such rebates and reimbursements.

Right now I'm only concerned abt education reimbursement..... but I can see the value of having an asset acct for he occasional rebates such as on PC equip.

And technically...... from an accounting viewpoint.... isn't Jim's advice the correct one? I mean an rebate or reimbursement is a "asset", correct?

Oops..... I'm sorry.

It was Mike L who suggested the asset acct.

Not Jim.

My bad

OK

But what categories for them?

Use "school" for the expense.

But what category for the reimbursements?

Again... the goal is to know what the "cost" was for classes...even tho technically they've cost me nothing as work has paid for them.

I'm not sure I agree

If I remember correct from Actt 101 class.... money owed to you is a receivable or "asset"

The "cost" the example above is still $100....even tho after receiving the rebate you really only spent $80

Someone correct me if I'm wrong.

Another question....

Do I enter that rebate or refund when I GET it?

Or do enter it even before I get it? As money "owed" to me?

The reimbursement is income, which is a P&L account, not a balance sheet account. I'm not going to go into the debits and credits of it all, since I am off duty until tomorrow (Monday) morning, but suffice it to say the we use the cash basis of accounting for Quicken purposes (QuickBooks allows you to select either cash or accrual basis accounting), so we should record the payment as an expense, and the reimbursement as either an expense or income. I prefer income. Keeping track of when (or whether) the rebate is received is, in my judgment, not a proper Quicken function. I used to use an Excel spreadsheet, but that became too much of a burden, so now I don't track whether or not a rebate is received. It is just not worth my time and effort.