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Using a Health Flex account

I can see results for HSAs and not flex.

A portion of my paycheck goes into a health Flex account. As of the start of the year, I can spend the entire year's total before the entire year's amount is deducted from my pay.

I have been putting the deposits into a "savings account" and I pay myself back when I receive a check creating a deposit into my checking and a withdrawal from the Flex. When I submit a receipt, I receive a credit from the Flex account. How do I credit those $ to my medical expenses?

Should I create an account with the entire year's total and use that account for expenses that can be deducted? If so, where do I put the $ that are deducted from my paycheck?

I am confused.

Paul
Quicken user since 1997 when Dollars and $ense died.

Comments

  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    HI @Paul Kleeberg,

    I am having a little trouble understanding the transactions that you are making, as described above.  However it sounds like you are trying to determine how you can track the total amount of medical expenses that are being paid through the Flex account during the year for the purposes of knowing how much can be deducted on your tax return.

    If that is what you are looking for, I wanted to save you the time and effort.  A health flex account is used so that folks can use pre-tax dollars to pay for medical care expenses.  So the money that goes into the Flex account has not been, and will never be, taxed (at least for U.S. federal tax purposes), and because it is pre-tax, you cannot deduct any medical costs or expenses that are paid with funds from a Flex plan on your Federal tax return.

    Let me know if you have any follow-up questions.

    Frankx


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  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    Set up 2 new accounts to handle this.  A banking (or cash) type account and an "other liability" type account.
    At the beginning of the year, transfer the entire Flex amount from the liability to the asset.
    Throughout the year, SPEND from the asset account and direct your paycheck withholding to the Liability account (to pay down the liability).
    You didn't state what happens if you overspend, or if there's money left over in the asset account at year end ... but you'll probably need to at least think about those 2 conditions.
    You'll probably need to set tax attributes on the liability accounts ... but I'm unsure as to what those would be.  Is the deduction pre-tax or after tax?
    And, the expenditures from the asset account would need consideration depending upon the tax status of the deductions.

    Q user since DOS version 5
    Now running Quicken Windows Subscription,  Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Paul Kleeberg
    Paul Kleeberg Member ✭✭
    NotAPCA

    More details: It is pre-tax, I cannot overspend and I need to submit receipts.

    That is similar to what I was considering. The only complication is that I pay for the service with a credit card, pay the credit card in full at the end of each payment period from my checking account (I like the cash back) and then get reimbursed by the Flex company which goes straight into the checking account. I am stuck when the check comes in. It looks like income. When I track employee expenses, I put the expenses in an accounts receivable and then when I get the reimbursement it comes out of the AR account. I am sure I could do something similar here but I am still challenged on understanding how.

    This is what I am considering: paycheck goes into an AR account, payment for services comes out or the AR account and I track deposits and withdrawals. that way I can track the withdrawals. That way I will know when I hit the max whether or not all the deposits are in from my paycheck. Problem is I have yet to find a report that will allow me to separate deposits and withdrawals so I can total each separately. Does that exist?
    Quicken user since 1997 when Dollars and $ense died.
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