Why does Medical Insurance Premium show as negative inflow?

Question

I am looking at a cash flow report and noticed that my pre-tax paycheck deduction for medical insurance premiums shows up as a negative amount  under "inflows". Intuitively, I would think this would be better reflected as a positive amount under "outflows". I assume this is happening because it is a deduction on my paycheck (income).

Does anyone have a thought on whether this is the correct way to be thinking about this sort of expense? If it should be outflow, what should I do to change the way it is appearing?

Chris_QPW · Answer

As I look at this a negative income looks correct.

Here is what is happening.  Employer pays your $1000 but takes $100 out of your income to pay for your medical insurance.
If you look at the tax lines for "Salary" and for "Employer Benefit" you will see that they are both W-2:Salary or wages.

So, the effect is that you are reporting $1000 - $100 as your income to be taxed.

harry askenazi · Answer

> @UKR said:
 > Is the category you use for medical insurance defined as an Income category? It should be defined as an Expense category or a subcategory to an Expense parent category.

Yes, it appears that Quicken's default for this category on a paycheck is as a sub category of "employer benefit", which itself is an income type category.

Do you suggest not including these medical premiums under "employer benefits, and instead creating a separate expense category? Or should the entire Employer Benefit parent category be reclassified as an Expense type category?

UKR · Answer

Is the category you use for medical insurance defined as an Income category? It should be defined as an Expense category or a subcategory to an Expense parent category.