How would you categorize this?

DeeEhm

Say I have a 10 month contract for a total of $1200.
-$120 for is deposited into "checking A" for 10 months (Jan to Oct).
-But, I want to receive an equal amount over 12 months, so I transfer $20 a month from "Checking A" into "Savings X" for 10 months.
-In November & December I transfer $100 from "Savings X" into "Checking A"
-All that gives me $100 of income to spend for all 12 months.

If I categorize the $20 transfer as a "transfer" it will show as money I have available to me (which is incorrect) so it seems it should be an "expense." If so, then do I call the Nov/Dec $100 transfers back into "Checking A" as "other Income."

Thanks!

Boatnmaniac

Hi @DeeEhm .  I think you were on the right track in you first post.

• $120 deposit to checking each month for 10 months.  This is your income.
• $20 transferred from checking to savings for those 10 months.  These are not expenses.  They simply move existing cash from one account to another...there is no net cash loss or gain from this action. 
  
• $100/month transferred from savings to checking in months 11 and 12.  These are not income.  They simply move existing cash from one account to another...there is no net cash loss or gain from this action.
  
• The net is that you end up with $100 of additional cash available in your checking account for the next 12 months.
  

That is exactly how I would do it.  Now, if you cannot remember to not touch that cash transferred into savings until months 11 and 12, then that is another issue.  But from a bookkeeping/accounting perspective that is exactly how to do the transactions.

If you try categorizing the transfers as expenses or income instead then you need to understand that for that 12 months your savings account in Quicken and at the bank will not match each other.  And, if you use Quicken for Tax Planner and tax reports, you income will be incorrectly stated (higher than what it actually is.

DeeEhm

UPDATE: As I think about it, if I categorize the $20 from Ck A to Sav X as "Expense" and the Nov/Dec transfer from Sav X to Ck A as "Other Inc" then I will show more income than I actually have. Therefore, should I mark the original deposit of $120 into Cking A as a split transaction? $100 income and $20 "expense"???

DeeEhm

Sorry! I don't see how to edit my posts. I know this is obnoxious. UPDATE: That won't work. The $120 goes in as a deposit and the $20 is a separate transaction that needs its own category. Flummoxed!

Boatnmaniac

Hi @DeeEhm .  I think you were on the right track in you first post.

• $120 deposit to checking each month for 10 months.  This is your income.
• $20 transferred from checking to savings for those 10 months.  These are not expenses.  They simply move existing cash from one account to another...there is no net cash loss or gain from this action. 
  
• $100/month transferred from savings to checking in months 11 and 12.  These are not income.  They simply move existing cash from one account to another...there is no net cash loss or gain from this action.
  
• The net is that you end up with $100 of additional cash available in your checking account for the next 12 months.
  

That is exactly how I would do it.  Now, if you cannot remember to not touch that cash transferred into savings until months 11 and 12, then that is another issue.  But from a bookkeeping/accounting perspective that is exactly how to do the transactions.

If you try categorizing the transfers as expenses or income instead then you need to understand that for that 12 months your savings account in Quicken and at the bank will not match each other.  And, if you use Quicken for Tax Planner and tax reports, you income will be incorrectly stated (higher than what it actually is.

DeeEhm

Thank you, @Boatnmaniac I'll give this a shot! Appreciate your time!