Deduct $2500 From Monthly Spending?

[ShokWaveRider]

We have given ours (in advance of receiving our paper check) to our local homeless and "No Kill" Animal Shelters. When (When being the operative word) we eventually get our paper check, if we ever get it, we will simply replenish the account where we got it from.

We figured they need the money NOW, and cannot afford to wail until we actually get ours.

 

[W2R]

I account for mine as misc income.

Other income, done.

+1

 

[Montecfo]

c'mon bro, give her a ledger entry lol

It is an advance refundable tax credit

Debit cash
Credit income tax expense.



How to use it? For me, charity.

 

[Helen]

We only loosely track our spending since our withdrawal rate is well below 4%.

We already sent checks to friends who are out of work. They will spend it and help the economy, we would have just parked it in a bank account.

 

[Rianne]

I think my question was misinterpreted or I incorrectly stated it. Many here have posted their monthly expenditures, as I have. This money (incorrectly stated $2500 not $2400) is sort of free money. We are giving a portion away, charitable and giving some to family who needs it. Is it an expense? Our normal charitable donations are still an expense. Would you count this $2400 as an expense if you're giving it away or using it to pay bills?

 

[atmsmshr]

Different story, but I remember once having to sign off on a $225 million entry.

That's almost real money in my house.

Please tell the story.

 

[RunningBum]

Well, your original post was confusing. You asked about this incoming money as an expense, which didn't make any sense. The quality of answers often depends on the quality of the question asked.

What is the goal of your accounting, or the basis of this question?

If it's to track expenses, the right question to me would be to ask if you do extra charitable or personal giving should be tracked as an expense. If these were one-time things, I probably wouldn't, or have two numbers: one with the extras, one without.

If it's to ask if you should make your usual $3500 monthly withdrawal, or withdraw less because of this extra money, I would reduce my monthly withdrawal by the amount I used the extra money for every day expenses, but not the one-time giveaways.

Some other reason? Nobody is going to audit your books, so account for it in a way that makes the most sense to you.

 

[Rianne]

Well, your original post was confusing. You asked about this incoming money as an expense, which didn't make any sense. The quality of answers often depends on the quality of the question asked.

True, my DH says the same thing about my questions. I guess that's why we laugh a lot. Married 35 years and we still do not understand each other.


Regarding my question: I'm going to "write off" $2400 of our expenses this month. That's my way of accounting. I"m actually surprised I got so many responses.

 

[RockyMtn]

The impact of a Stimulus Package...

It is a slow day in the small Idaho panhandle town of Pumphandle, and the streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.

A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night. As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.

The guy at the Co-op takes the $100 and runs to pay his debt to the local "lady of the night', who has also been facing hard times and has had to offer her "services" on credit.

The "lady of the night" rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves. No one produced anything. No one earned anything...

However, the whole town is now out of debt and now looks to the future with a lot more optimism.

 

[Rex]

spend it....on anything not made in China!

 

[bobandsherry]

The impact of a Stimulus Package...

It is a slow day in the small Idaho panhandle town of Pumphandle, and the streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.

A tourist visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night. As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.

The guy at the Co-op takes the $100 and runs to pay his debt to the local "lady of the night', who has also been facing hard times and has had to offer her "services" on credit.

The "lady of the night" rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves. No one produced anything. No one earned anything...

However, the whole town is now out of debt and now looks to the future with a lot more optimism.

Nice story, and maybe in a perfect world. However, not how the stimulus package will work. Someone would just save the money or maybe spend the money on something else and just let the other sucker hold the debt, who eventually write it off as uncollectable. As a result the "tourist" (aka government) is never made whole.

 

[RobbieB]

I do no accounting.

 

[RockyMtn]

Nice story, and maybe in a perfect world. However, not how the stimulus package will work. Someone would just save the money or maybe spend the money on something else and just let the other sucker hold the debt, who eventually write it off as uncollectable. As a result the "tourist" (aka government) is never made whole.

Really? Gee, thanks for the econ lesson.

 

[razztazz]

Nice story, and maybe in a perfect world. However, not how the stimulus package will work. Someone would just save the money or maybe spend the money on something else and just let the other sucker hold the debt, who eventually write it off as uncollectable. As a result the "tourist" (aka government) is never made whole.

You can tell that same story and give the same response about capitalism itself. Too many people doing too many things to get the "stick figure scenario" results everybody thinks is "only natural." . The questions is: How close do we need to come? In a sense , to use another metaphor, everybody thinks they need to score. The reality is they just need to keep getting yardage so they can stay in the game.

 

[N02L84ER]

I recorded the deposit in Quicken as 'Gift Received', it came from my Uncle Sam.

On the expense side, I am recording the increased, daily, take-out tips of 50%+ as 'Gifts' and will continue these large tips until the total has been spent.

 

[bobandsherry]

Really? Gee, thanks for the econ lesson.

No charge, well you could leave $100 on the table though. [emoji39]

 

[RockyMtn]

No charge, well you could leave $100 on the table though. [emoji39]

sorry...didn't qualify for a check!

 

[Teacher Terry]

We put it in savings. But we are feeding my son who recently returned from Vietnam where he was teaching English. After months of not working he was running out of money with the schools closed. So our grocery expenses increased by 200/month so we are really putting it into the economy.

 

[Palmtree]

I think we will take 50% and use it to pay a portion of the tax on another roth conversion. The other 50% is going toward eating at local resturants with generous tips to the servers.

 

[Walt34]

DW has the bulk of it earmarked for a hardwood floor in the family room. Some of it will go to some pizzas, and some of it to a couple or three R/C airplanes. Hobby industries are also some of the first to take a hard hit in recessions so I'll do all I can to help them out.

 

[SecondCor521]

I think my question was misinterpreted or I incorrectly stated it. Many here have posted their monthly expenditures, as I have. This money (incorrectly stated $2500 not $2400) is sort of free money. We are giving a portion away, charitable and giving some to family who needs it. Is it an expense? Our normal charitable donations are still an expense. Would you count this $2400 as an expense if you're giving it away or using it to pay bills?

I read your later reply so I saw how you are going to handle it; if it works for you that's what matters.

For me, I recorded it as "Misc Income:Fed Tax Refund" on the $1200 deposit into my checking account. When I give money away it goes under "Charity" (if deductible to a real 501(c)(3)) or "Kids:Gifts" if it's to my kids. This matches in my brain what happened more accurately because it accounts for both the income and the expense side of things.

So in your scenario, my reports would show that my income in April was $2400 higher than typical, and my expenses in some categories were also higher.

I passed Accounting and understand double-entry in principle, but would never have made it as a CPA in the real world. Quicken's pseudo-double-entry stuff is about right for my brain.

 

[HadEnuff]

I am investing the entirety in toilet paper, hand sanitizer, and Spam.

 

[audreyh1]

To me, it is simply a windfall and will go into savings, no accounting necessary.

Exactly! Just more income - except we’re not getting any.

My income and spending are decoupled anyway. Income puts money in short term accounts. Spend pulls it out and it vanishes.

 

[racy]

...How are you accounting for this $$ ?

Giving it back to a government entity: paying the first half of this year's real estate tax.

 

[Souschef]

I got less than $500, and bought 4 wheel rollators which I donated to our local hospice. I have not been able to go to the hospice to repair the ones they have.