Using Cash Account in Quicken

Does anyone use a cash account? If yes, tell me why you use and how it benefits you?

Reply to
anonymous
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I do. It reflects the cash that I have in my pocket. When I spend pocket cash on something, I'm able to categorize it letting me know what I buy a lot of. "Miscellaneous" is not acceptable!

Also, we have a number of bank accounts and I needed a way to track the money flowing between them. So when I send money into our joint account the category is Cash:WWP (me). When GF does the same, it is Cash:CLL. That lets us see who has put in how much.

Reply to
Stubby

"anonymous" wrote in news: snipped-for-privacy@g47g2000cwa.googlegroups.com:

I use it to record and categorize cash payments which are have tax implications. For example when I buy a $5.00 bottle of aspirin I record it as a medical expense.

I also use it to track job search expenses, such as mileage and tolls when going to a job interview.

Reply to
Porter Smith

"Porter Smith" wrote

Aspirin is not a deductible medical expense.

Reply to
Rick Hess

It could be if your doctor prescribed that you take it.

Reply to
Ken Blake

AFAIK, aspirin available OTC is never deductible.

From Pub 502: "Except for insulin, you cannot include in medical expenses amounts you pay for a drug that is not prescribed.

Example: Your doctor recommends that you take aspirin. Because aspirin is a drug that does not require a physician's prescription, you cannot include its cost in your medical expenses. "

If aspirin is prescribed by a doctor in a form that is only available by prescription then it would be deductible. I doubt that the OP's example of "when I buy a $5.00 bottle of aspirin" would qualify.

A purchase via a HSA account may also qualify aspirin, but that's not the same concept.

Reply to
Rick Hess

Yes, what you quote seems very clear, and I'm wrong. Sorry.

Reply to
Ken Blake

"Ken Blake" wrote

(snip)

Certainly no apologies necessary Ken; we may both be right.

Although my health is far from perfect, I consider myself blessed to not require prescription painkillers -- ergo, I'm not as informed about the possibility of prescription-only aspirin. But if there is such a thing then it would certainly be deductible (if prescribed by a TP's doctor).

Reply to
Rick Hess

I have a flexible spending account for medical expenses. Though aspirin may not be a tax-deductible medical expense, it's one of those over-the-counter items that my FSA allows me to pay for out of pre-tax dollars. That is, if it's prescribed by my doctor.

Regards,

Margaret

Reply to
Margaret Wilson

Back to OP's original question ...

1) Found it useful to record in Cash Account receipt of check(s) I couldn't deposit immediately (for variety of reasons), then transferred from Cash to bank account when the deposit was actually made.This allowed tracking of funds "on hand" - in any form - and correctly reflects deposit date matching that in FI statements. 2) Same for rollover/transfer of funds from one FI to another, when the funds "disappear" from the first FI's statement but have not yet been posted at the new FI. 3) Real property sale commission fees and title fees which were directly paid by the closing agent to the broker & title companies from proceeds from sale were also recorded in Cash account with appropriate (for my scheme of things) Category entry. 4) Co-pays to health care providers when I didn't have credit card handy or forgot my checkbook. 5) Recording of health-related travel mileage and expenses, which eventually proved not to be worth it to us. (This was mentioned by others in thread).

As to keeping track of cash expenses (also mentioned by others in the thread), in our case my wife has not accepted a raise to my allowance since the 1974 oil crisis. As we tailored our lives to always pay with credit cards and our weekly allowance is only US$20 per person, we just enter the ATM withdrawal of US$40 in the checking account and spend it "fancy-free" without need of disclosure. Now that we are retired, the once weekly withdrawals are less frequent.

NOTE: In all cases where entries yield a negative balance in the Cash account, unless there is a corresponding balancing transaction, I place an Adjustment transaction to keep Cash at zero. For example, the infrequent cash copays come out of my miserly (my wife does not read these postings, I hope) allowance already deducted in the Checking account, but recorded in Cash to be part of medical category reports at tax time.

Jay

Reply to
Jay M Apple

I have a fund for Chirstmas Shopping that I keep in a cash box and I deposit a fixed amount every month from my budjet. Occasionally I "borrow" from it and the fact that I enter all transactions in Quicken helps me to account for all transactions and to ensure that the fund meets the budjeted amount when my wife takes the cash for shopping.

Reply to
News Guy

I give myself a monthly "allowance," as I get paid monthly. Once or twice a week I do an "update balance" split transaction and categorize appropriately. All my spending is either paid by cash, charged to a CC (balance paid off at month's end) or ACH'd from my checking account. Keeping a cash account has really helped me figure out where my money goes and trim my budget accordingly.

Regards,

Margaret

Reply to
Margaret Wilson

Often times we'll go to a restaurant with others. Sometimes they'll pay with cash and we'll pay the whole bill with our credit card and keep the cash for pocket money. We'll record the credit card in Quicken as a Dining expense. Then make an entry in a Cash account to indicate that we received money for Dining, and make another entry in the Cash account that withdraws the same amount as an Entertainment (or whatever pocket money title you'd like to use). We don't track the details of how pocket money is actually spent.

There are other situations where we may purchase a group gift and receive cash from people that are chipping in. We handle that the same way.

We could handle it with Split's in other accounts and avoid the Cash account, but using the Cash account makes it very easy to understand. We never have to deal with positive and negative amounts within a split this way. Doing it this way our Cash account always has a balance of zero, but reports on spending by category are always correct and easy to understand.

Bernie

Reply to
Bernie

Sometimes I pay with cash for things that I want/need to keep track of. I do *not* use a cash account to keep track of every penny that goes into and out of my pocket. That just isn't realistic for me.

A good example of how I use it is business expenses. I track them and when I get a reimbursement, I put it in as a negative business expense, so that in theory this category comes down to zero. This is all fine and good as long as I use my credit card, but when I pay cab fare or tolls or tip someone and use cash, there's no record of it in Quicken, so I put it in the cash account with two transactions: a debit categorized as "business expense" and a credit to "Cash." It's a reflection of reality, in that I transferred some of my own cash into a business expense and I use the cash account to reclassify it. The cash account's balance is always zero.

Another cash account that I have set up is for my daughter's allowance account. Her allowance is paid via automatic transfer at the bank twice a month from my checking account into her savings account, which has nothing to do with the cash account. She's too young for the bank to issue her an ATM card, which is actually how I wanted to arrange things. It's not convenient for us to withdraw money from her bank account every time she wants some (and the bank has a limit on the number of withdrawals allowed every month on her free minor account). So I keep track of money she "borrows" from us (I use quotes here because it's really her money after all) in a cash account. When she gets some cash or I buy something on her behalf, it's a credit, and if my wife or I borrow money from her, it's a debit. The other side of the transaction is what really happened, so if she buys a video game and I pay for it with my credit card, I put a transaction in my CC account and put the category as [K's unposted transactions] (the name of the cash account). Every now and then, I will zero out the "K's unposted transactions" account with a credit, and the other side of that transaction is a debit to her actual savings account, and at the bank, I actually transfer that money out of her account and into mine.

I have no idea if any of that makes any sense, but it works for me. If she ever asks where all the money went, I can print off the transactions in the cash account for an itemized accounting of where she spent it all, and meanwhile, her savings account in Quicken reflects what happens at the bank.

Stan

Reply to
Stan

Hummm. Suppose the total bill is $30, $10 yours and $20 theirs. You make entries

CC Account ABC Restaurant Dining $30 Cash Account ABC Restaurant Dining -20 Something Entertainment 20

All of which is a single entry in the CC account.

CC Account ABC Restaurant $30 splits: Dining 10 Entertainment 20

It's interesting to observe other peoples "easy".

The positive and negative entries are amongst your three entries, there are no negatives in the split entry.

as it does with the single split entry.

It's very interesting to observe other peoples "easy".

dick w

Reply to
Dick Weaver

Why not simply split the credit card entry 50-50, one category being 'Dining', and assigning a class (not category) as something like 'OTHERS' to the other half, and simply exclude the 'OTHERS' category in any reporting/budgeting you do? Seems a lot simpler to me.

Reply to
Andrew

I instead record the entire payment to the restaurant in the credit card account, and split the transaction among Dining (memo "My portion") and [Cash (Wallet)] (memo "Friends' portion"). The second split item is a transfer to my cash account called "Cash (Wallet)".

The payment and split categorization represent the actual events in real life and result in proper balances and records for each account and spending category.

Reply to
Steven E. Harris

"Ken Blake" wrote in news: snipped-for-privacy@corp.supernews.com:

This brings to mind a joke that my first manager told me about expense reports:

A dor-to-door salesman wore out a pair of shoes every week. When he sent in his expense report, he put the cost of a pair of shoes on it. Each week his boss would deny the shoes line item. This went on for years.

One week, the boss was reviewing the salesman's expense report, and there was NO shoe expenditure line item. He was so surprised, he called the salesman.

"Hey wgat happened ? No shoes in the expense report."

The Salesman replied "Oh they are in there, you just have to find them "

So there is more than one way to deduct what you want, if you are so inclined...

Reply to
Jungle Jim

On Wed 27 Jul 2005 06:37:41p, Rick Hess wrote in news:LTUFe.3892$ snipped-for-privacy@bignews3.bellsouth.net:

I know of a girl who attended an all girls college that forbade drinking on campus. She had a doctor's prescription for malt liquor as a sleeping aid and was allowed to keep it in her room. She did have some nice pizza parties.

Reply to
The Michael

"The Michael" wrote

I may be going out on a limb here -- and I'll most certainly be corrected shortly if that's the case -- but I don't believe that this would qualify as a medical expense, although I'm quite certain she didn't care. And she was probably the most popular girl in her building!

Reply to
Rick Hess

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