Question about split transactions

Hello,
I'm coming from Money, and there is only one thing that is bugging me in Quicken: how to enter split transactions. Maybe there is a way to do this in Quicken, but I can't find it!
Let me use an example, an expense with two categories: - Games - $25 - Software - $35 - Sales Tax - $7 - TOTAL $67
In Money, I could type $67 as total, and once in the split window, I could type $25 and $35, and let Money assign the difference ($7) proportionately into all categories by pressing F6. Or I could assign that difference to one single line item, if applicable, pressing F5.
Is there something similar in Quicken? When I'm splitting a transaction in 4 or 5 splits, it is a pain to have to calculate sales tax one by one.
Thanks!
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Hi, Jose.
I've always done it "the hard way", I guess. :^{
In the Split transaction screen, I enter each taxable item's actual price, then press * (for multiply), enter 1.0825 on the numeric keypad, and press Enter. (Our combined State and local sales taxes are 8.25%.) So, for a $39.95 item - like the Quicken 2010 Deluxe that I bought last month, my keystrokes were: 39.95 * 1.0825 <Enter> - and Quicken calculated the $43.25 (after rounding) and entered it, then went to the next Split line.
It might be easier for someone like me, with over 50 years experience on 10-key adding machines, and it can get tedious on those few transactions when I need to split the tax between more than 3 or 4 lines. But I rarely find it a problem.
I think there is an automatic allocation feature, but I don't recall ever having used it.
RC
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R. C. White, CPA
San Marcos, TX
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You can do that in Quicken. At the register type in $67 and then click for splits. The first line in the split will be $67. If you then over-type the $67 with $25, the second line in the split will show the difference, and so on.
Hope this helps.
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superjacent wrote:

How is this proportional allocating the different parts of the $7.00 sales tax to each line as the balance goes down? I trust you might not have read the subtle question!
You're right in that as you delineate how much of the total should be on each line, that doesn't do what the OP asked which is how to automatically ALSO allocate the sales tax percentage to each line.
To RC who also posted - I don't remember Q ever being able to do the allocation of sales tax proportionally across the board, but it would be nice - sometimes I allocate different purchases to different categories and would also like to add the appropriate sales tax to each line without manually calculating it like you mentioned in your other post.
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You're right, I didn't read the subtle question.
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As Andrew said, that doesn't really help. In my example, it would show $42 left after I type $25, and if in the second line I type $35 it will show $7 left for the third line, but THEN I would like to press F6 (as in Money), so the $7 are proportionately allocated to the two previous line items.
I guess you can do it manually, but heck, computers are supposed to make our lives easier!! :)
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Jose68 wrote:

http://quicken.intuit.com/support/feedback/ can be used to supply feedback; it's a good idea -- I should have asked for this years ago! I fact, I just did.
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I'll have to send my feedback too. It is really helpful, and should be really easy to implement.
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Jose68 wrote:

Yours is one of the many questions we see here that can be reworded as "why won't Quicken, an accounting program, let me violate all the rules of accounting and put any number I want wherever I want?"
You did NOT spend $28 on games and $39 on software. You spent what you wrote. If you wish to pretend that money you spent on taxes was spent on software, be my guest. But why would you imagine Quicken would be programmed to facilitate faking the numbers?
Doug
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Thanks for enlightening me, Doug. Maybe you want to reword my question as you did, but that would be your question, not mine. But maybe because I have worked as an accountant myself, I neither consider Quicken an accounting program, nor I want to track my finances as I would do as an accountant. For example, I do NOT want to track sales tax as a different category. I want to allocate sales tax. And I am sure that a significant percentage of Quicken users are NOT tracking sales tax as a different category, nor they would want to.
If I was to do as you seem to suggest, so "I don't fake the numbers" (good grief), I guess that if you purchased JUST the piece of software in the example about, you would create a split transaction to make sure you put $35 as software, and $4 as sales tax. What a pain. And what about expenses that I pay with my debit card and don't keep the receipt? Do I need to back-calculate the pre-sales tax portion and make a split for that?
The more I think about this, the more I would like to keep my question as it was. I would like Quicken to make my life simpler, and help me allocate sales tax (or anything else I want to proportionally allocate for that matter) as Money does. And don't worry, if Quicken hears me out, you won't have to use it. It would be an option. You can keep tracking sales tax for all your purchases.
But thanks for letting me know that I am violating accounting rules, and living around faked numbers. I never saw it that way.
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Hi, Jose.
You are right. Doug is wrong.
RC
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R. C. White, CPA
San Marcos, TX
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Hi, Doug.
I don't know where you studied accounting, but you apparently misunderstood what you were taught.
An expense - or an asset purchase - includes all the costs necessary to get the item into your possession and ready to use. Depending on the type of product acquired, those costs might include freight, shipping and handling, installation, commissions paid by the buyer...any of many kinds of expenditures. AND taxes levied on the buyer for the transaction, such as sales taxes paid to the seller (for transmission to the state) or use taxes paid directly to the state for items purchased sales tax-free (for resale or from another state in some cases) but on which the use tax must be paid.
A much longer lesson is available, Doug, but this should suffice for today.
RC
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R. C. White, CPA
San Marcos, TX
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R. C. White wrote:

University of Connecticut, many years ago. I understand aggregation of separate costs to form a larger cost, such as in Cost of Goods Sold.
But the way I was taught, sales tax does not add to an asset's valuation. If I bought a $10,000 truck and paid $1,000 State Sales Tax, I would debit $11,000 from my bank account, create a $10,000 asset, and book a $1,000 expense for Sales Tax. Is that not correct?
I believe that for OP to wish to distinguish his computer game expenses from his software expenses, but not his tax expenses, is whimsical. He has every right to be whimsical in his bookkeeping if he wishes, but there's little reason for Quicken to have been programmed that way, is there?
Doug
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I'm actually having a hard time thinking of a situation in which one would capitalize a point-of-sale Sales Tax payment. Maybe there is one.
I understand the impulse to fold the sales taxes paid to the State into the "cost" of the purchase. Now that Sales Tax is generally not federal deductible, there's little benefit for an individual to track the expense. One could just as easily IGNORE the taxes, too, and (using Quicken's feckless terminology) simply not categorize that portion of the split instead of apportioning them.
Many of my purchases involve a mix of taxable and non-taxable items. So when for example I'm splitting a Costco bill, I might have some portion categorized as groceries, some as clothing, and some as medicine. In my state, groceries aren't subject to sales tax, so if Quicken apportioned the sales taxes to all the split categories, that would be incorrect also.
But I still come back to the notion that Quicken can't be expected to read my mind. It has to be programmed with some conventions in mind, and the conventions Intuit used are vaguely based upon bookkeeping principles. My recollection is that this thread began with a new Quicken user asking why Q didn't let him do something that Microsoft Money did let him do. The only reasonable answer is that Intuit didn't write the software that way because they didn't think anyone would/should want to falsely categorize an expense.
Doug
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Well, from a strict theory standpoint, R.C. White expressed the accounting convention correctly, so there's actually lots of situations where you'd capitalize sales taxes. Quicken gives you the flexibility to be conventional or unconventional in your accounting. :-)

You've expressed the most significant problem to the "really easy to implement" process of automatic allocation of sales tax. In California, unprepared food items sold at supermarkets are not taxed but ready-to-eat hot foods are taxed, as are soft drinks and cat food. But, for my accounting, it's all "food" and the only way an automatic allocation of sales tax could work is if I set up two categories of "food" - maybe "food non-taxed" and "food taxed" and then Quicken supplied a check box in the category setup that identified each category as to sales tax eligibility. Depending on how you categorize purchases, where you shop, and your local sales tax structure you could end up with dozens of categories you'd have to identify this way.


Nah, that's not the case. Accounting conventions are certainly *not* what drives the programming at Quicken; it's much more the "black letter" government rules and and regulations, e.g., capitalizing the "expense" of broker's fees in your stock basis. I've complained here before, many times, that Quicken should have a lot more accountants working on the product to catch improper accounting that's "built in" by the programmers.
Tom Young
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Hi, Tom.
wrote:

I agree.
Sometimes it's hard to recall that Quicken was designed as a checkbook program. It took a very pragmatic approach, ignoring accounting theory in many ways.

I practiced public accounting in California for 18 years (1962-1980) and had plenty of experience with the sales tax, both professionally and personally. Then I lived and practiced in Oklahoma for 10 years; the sales tax rules were mostly the same. Now I've been in Texas for nearly 20 years, but retired, so my experience here is only personal, not professional - but the general sales tax rules are still similar. "Groceries" are not taxable, but meals and some prepared foods are. As you said, a Quicken programmer would have to deal with "dozens of categories" in trying to program automatic allocation of sales taxes - and then we users would have to classify each multi-item purchase receipt to match those! Can you imagine how much WE would gripe about that inconvenience?

Tax laws are written by legislators - and very few of those are accountants. That's why so many corporations have to keep more than one set of books. One set is kept according to accounting principles developed over centuries by accountants who were trying to report accurately the results of business activities. The other set is kept according to laws, which are concerned with producing tax revenues and - more and more in recent decades - with motivating taxpayers to act in certain ways that lawmakers want us to behave. These tax provisions very often do not conform with accounting principles! They don't have to make sense; they are the LAW! :^{
Even if tax laws allow you to deduct the sales tax you pay on your new car or computer or shirt or candy bar, the tax on that transaction is still a part of the cost - to you - of buying that property.
Accounting theory has evolved over the centuries, but I suspect that, even at the "University of Connecticut, many years ago", that is what was being taught in accounting theory classes. That's what I was taught at the University of Oklahoma in the 1950's (BBA in Accounting, 1956). And I'm pretty sure that is what today's students are learning.

RC
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San Marcos, TX
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Well, of course it is "part of the cost". Aren't some costs expensed? Aren't some costs booked in one account, while others to other accounts?
Remember where this started: someone new to Quicken who wanted to categorize his expenses. I'm not disputing that sales tax is a cost. I am a little slow on the uptake here with the notion that sales taxes paid are an asset <grin>.
Doug
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Doug, I remember where this started. I did it. And let me tell you, I never said anything about assets!! My question was how to categorize them, as an expense, NOT an asset, if someone wants to do it in the same category as the item being purchased.
I understand you are suggesting that I categorize sales tax. Fine. You go ahead and do it.
I won't. For a few reasons: 1. I've lived in Spain, Singapore and California. In Spain and Singapore, sales tax were never deductible. So there was no point in using that category. 2. I don't see the value in knowing how much I spent in sales tax. But I want to know how much I spent in things, including EVERYTHING that I had to pay in exchange of the given good 3. A lot of my expenses are in just one category. As I download the expense from my bank or credit card, I can assign the TOTAL amount to a category. Having to split every single entry in Q would be a pain so big that... I wouldn't do it :)
So, for those of you that do not care about sales tax as a category, and include the tax in the original category, how do you enter this transaction from Walmart?
- $35 in clothes for my kids - $25 in clothes for my wife - $30 in a cool accessory for my car - $45 in a lamp to replace the one I broke last week - $20 in replacement parts for my bike - $13.56 in sales tax (8.75% in San Diego) - $168.56 total
Do you type this? - $35 * 1.0875 - $25 * 1.0875 .... and so on???
What I'm saying is: you type (or is downloaded) a total of $168.56. Then you type $35, $25, and so on, going thru your receipt. And when you are done, there is an unassigned value of $13.56. At this time, you press "F6", and all amounts are basically multiplied by 1.0875 (instead of you typing *1.0875 5 times, in this example).
Am I so crazy asking Q developers to look into this? Is this as insane as Doug suggests?
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Hi Jose - please forgive me for beginning my comments, days ago, with the notion that you should not want to do that which you clearly want to do. Categorize anything you want any way you want.
Now - Jose68 wrote: > 2. I don't see the value in knowing how much I spent in sales tax. But > I want to know how much I spent in things, including EVERYTHING that I > had to pay in exchange of the given good.
Do you see the value in knowing how much you spent in state or local income tax, or property tax? Why do you want to know only some of your tax burden?
I live in the suburbs outside Washington, DC. I sometimes shop in Maryland, Virginia, and in DC itself. The sales tax regimes in all three are different. Only by categorizing sales tax can I have any idea what I'm paying.
One might very well expense the cost of a piece of software, but I certainly want to consider big-ticket, long-life purchases as assets in my Household Inventory account. Things like motor vehicles, living room furniture, photography equipment, or major electronics. For my own uses, Quicken is just as important for giving me an accurate Balance Sheet as it is for listing my income and expenses. Maybe more important.
enjoy Quicken, Doug
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No need to apologize, Doug! And let me clarify my point about tracking sales tax. What I said is that I don't see the value in know how much I spent in sales tax. But that is me. I can certainly understand why some people might want to do it. But for me, it's just not worth it.
A large percentage of my transactions are single-category. If I were to track sales tax, most of them would be split categories, and it would just take more of my time.
Now, for big items, I actually, do something similar to what you do, and what other posters were saying. I transfer all the amount to an asset account, including sales tax, but I depreciate sales tax immediately. The difference is that, in "my books", that depreciation is in the category Auto:Depreciation, instead of Sales Tax. It works for me. I can understand how your way works for you.
But then we are back to square 1 :) If someone wants to allocate sales tax in a split for several categories, Q is not providing any help. And it would be an easy programming addition.
Anyway, thanks for the conversation! It's always interesting to read different points of view!!
Jose

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