Online Services for "Asset" accounts
I have an HSA to which I contribute a pre-tax deductions through my paycheck. My HSA provider allows for Online Services, but you can't link an "Asset" type account to an Online Service and you can only assign pre-tax deductions to an "Asset" account.
Why can't "Asset" type accounts be connected to Online Services? Alternatively, could I assign a pre-tax deduction options of "Flex Spending" or "Dependent Care" to a different account type?
Right now I can either choose the right pre-tax option and manually synch my account or I can use the "Other Pre-Tax Deduction" and transfer to a Checking/Saving account which has Online Services connected. Why do either of these restrictions exist?
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Depending on the details of what's in the HSA - cash or investments - you could set up the HSA as a Savings or Investment Account. It seems that the programmers figured that the generic asset and liability Accounts would be used infrequently and not be connected to any real-world financial institutions.
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There have been many discussions on how to handle/setup an HSA account. I noticed when I initially ran the Quicken Paycheck Setup wizard it classified Pre-tax "Flex Spending" accounts (aka Health Savings Accounts) as an ASSET Account. Should I, or does it not matter, change this account to an Investment account Tom?
What limits would an Investment vs Asset Account have?
I also see that others have considered a Simple IRA setup, which then places it as a Retirement Account. I believe their issues were more tax-related concerns when importing to Turbo Tax and how each account is handled in Quicken… which I do not do.. I have rather created a report to cross-reference my W2 at EOY. This has seemed to work for me.
I actually have it "linked to" a dummy CC Acct called Medical~ Flex (below you see that as a "Linked Liability Acct" where all my BILLS go to.
Then I use a Flex-Spending Cash Acct to show the Reimbursement when I have enough to do so. This way I track what I am still owed.
(hmmm. maybe it should be linked to the Flex-Spending Cash Acct; Can you explain what "Linking" does?)
Could not think of a better way many years ago when I started Quicken for personal use. I had been an avid user of QuickBooks for 25 yrs for our business and miss the options they have that Quicken does not. 🙄
I have just been playing with it a little bit to see what the difference created account options have.
Hopefully someday, Quicken will properly include HSA as an option for setup.
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@JS&BS I have my HSA Cash account set up with an account type = Checking. There are several reasons for this.
- The account has a debit card
- The account can have checks
- In the update file from the Financial Institution, the account type is coded as "CHECKING", specifically, <ACCTTYPE>CHECKING.
Also, for tax purposes, I have coded the HSA Investments account as tax deferred and the HSA Cash account as not tax deferred. Any income in the HSA Cash account is coded as "not taxable". This way, the tax reports for the HSA are correct. The medical related payments show up on Sched A, but the income is excluded form Sched B.
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I would set up an HSA (Health Savings Account) as a Savings account coded as tax deferred. This would be entered into OSU without a problem. Pre-tax deductions from your paycheck would be allocated to that account. Distributions from the HSA would be transferred to a checking account, or another savings account if you prefer.
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@RalphC the only distributions from an HSA cash account should be for approved medical expenses, otherwise you will be taxed for the Distrubutions. If a transfer is made to a checking or savings account, then that should only be to offset a medical expense.
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@JS&BS - Flex spending accounts and HSAs are not the same thing. I can see why there is some confusion. HSAs should not be set up as an FSA on Quicken. An FSA can be considered an "asset" because their use and functionality is very limited. It is a savings account where your employer sets aside, or defers some of your earnings, for a specific time period and usually needs to be used by the end of that time period which is usually a year.
HSAs are more complicated. They have two components: an investment account and a cash (checking or savings) account. Therefore, I would not advise setting up an HSA as an asset account.
The HSA cash component should be set up as a "savings" or "checking" account, whichever you prefer. I found that setting it up either way made no difference in how the account got updated via OSU. Setting it up this way, you should also have no issues with setting up the link with the paycheck wizard.
The HSA Investment component should be set up as a "Brokerage" account. Depending on the capabilities of your HSA provider, you may or may not be able to link this investment piece for automated updates. I have seen that most HSA providers don't have the capability for automated updates for the investment account. So most likely the HSA investment account would be manual updates only.
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@QuickUserPSP I am a retired federal employee, and I did set up my FSA as a Savings account. I would suggest that an HSA and and FSA be treated the same way in Quicken. Medical expenses are paid from an account (checking, credit card, etc) being coded as a medical expense, and then you are reimbursed which would be a transfer back to checking. The difference is in the management.
From CoPilot:
In summary, HSAs offer more flexibility, triple tax advantages, and
portability, while FSAs are employer-owned, less flexible, and have
stricter rules regarding rollover and withdrawals. Choose the one
that aligns with your health care needs and eligibility.0 -
@RalphC I spent 30 years in the retirement industry managing retirement accounts. In my opinion, HSAs and FSAs should not be set up the same way in Quicken. Yes FSAs should be set up as a savings account in Quicken. I said that they could be considered as an asset but should be set up as a savings account.
The HSA has an investment component that the FSA does not have. The differences are more than just administration. You draw from an HSA directly to pay for your qualified medical expenses. You usually have a debit card and can have checks. An HSA cash account is set up with online services in Quicken. The HSA investment component can be set up with online services, but it depends on the capabilities of the HSA provider. The account is kept as long as there are funds in the account.
The medical expense is not directly drawn from the FSA account. The FSA account does not have online services. The only transactions are transfers in and out of the account. It is used only as a holding account and has no other function. The funds are transferred to another account to reimburse the medical expense. The FSA funds usually need to be used within the year they are deferred.
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@RalphC - we are really in agreement with each other. HSAs and FSAs have different features and but are both used to pay medical expenses with tax deferred funds. They both accomplish this by different means.
The one thing I see with retirement accounts and Quicken that concerns me is that users don't realize how complicated they are and assume that Quicken should be able to handle all aspects of their setup and functionality. In my opinion, Quicken may be able to accommodate the investment piece of retirement accounts, but will never be able to effectively handle the administration side of retirement accounts, nor should they be expected to. Users don't seem to understand the ramifications of asking for special Roth, After-tax or HSA account setups or handling. What most Quicken users see is just the tip of the iceberg and not the complexity of a retirement account. But I guess it's up to Quicken to decide if they want to add incomplete, issue ridden retirement account features, or not add them at all.
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At the end of all this I'm still looking to download my HSA transactions into the HSA asset account.
Or information on how to convert an asset to a savings account.0 -
It's easy enough to convert that Asset Account to a Savings Account. Simply edit the Account, click Display Options and select Savings.
You still won't be able to download transactions into this Account however as it doesn't add the Online Services tab to the Account. You might try creating a Savings Account and then moving all the transactions from the Asset Account to the Savings Account, which does have the Online Services tab. Be sure to make a backup before hand.
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