Spending Tab - Spending vs Spending without taxes?

Nemo

What is the difference between Spending and Spending without taxes?

How does Quicken calculate the difference?

Thanks.

Boatnmaniac

@Ps56k2 - I believe @Nemo is referring the Spending tab. There is a drop down where one can select to show Income transactions, Spending transactions and Spending without taxes.

@Nemo - It's actually pretty simple. The Income and Spending options include all transactions in these category groups. The Spending without taxes is the same as Spending but with tax categories removed. It has nothing to do with calculating tax rates or sales tax on purchases or anything like that.

You can see the tax related categories by going to Tools > Category List. There is a column there with the header of Tax Line Item. If there is a tax line item shown in that column it means that category is a tax category and all transactions for that category will be excluded from the Spending graph when Spending without taxes is selected.

Chris_QPW

This has come up before and the statement "Spending without taxes" is misleading because that isn't what it does at all like @Boatnmaniac pointed out. If you remove all the categories with tax lines on them, you are also removing spending like charity, which isn't what most people think of when they say "Spending without taxes". This yet another one of those features that couldn't really be implemented correctly, but instead of just saying that they implemented something that is just not right.

Boatnmaniac

Yes, specific taxes categories are excluded. But if you dig into it further it you will see that it is not just the taxes categories that are excluded. You will also see that it excludes any category with a tax line item association so things like deductible healthcare insurance and medical/dental/vision expenses are excluded.

It makes some sense to be able to see what one's expenses are like after taxes have been taken out of the picture but for me it makes no sense to also exclude other non-tax but still tax-related categories.

BTW, many of the reports that are available also have an option on the Advanced tab of the Customize popup that can be checked to show only tax-related transactions which is a different twist from the Spending tab. It would make more sense, I think if the Spending tab would have an option to show only tax-related categories spending than to exclude that data so it would be more like the option that is found in reports. That to me would be more helpful but it would also be redundant because it would then be just like the data you get in the Tax Summary report.

Ps56k2

where or what screens or reports are you viewing for these questions ?

Boatnmaniac

@Ps56k2 - I believe @Nemo is referring the Spending tab. There is a drop down where one can select to show Income transactions, Spending transactions and Spending without taxes.

@Nemo - It's actually pretty simple. The Income and Spending options include all transactions in these category groups. The Spending without taxes is the same as Spending but with tax categories removed. It has nothing to do with calculating tax rates or sales tax on purchases or anything like that.

You can see the tax related categories by going to Tools > Category List. There is a column there with the header of Tax Line Item. If there is a tax line item shown in that column it means that category is a tax category and all transactions for that category will be excluded from the Spending graph when Spending without taxes is selected.

Ps56k2

@Boatnmaniac - ahh Tnx -

Just looked at last year, and for me the “tax” items were some Withholding, some ES-1040 payments, and local property tax bill.

Chris_QPW

This has come up before and the statement "Spending without taxes" is misleading because that isn't what it does at all like @Boatnmaniac pointed out. If you remove all the categories with tax lines on them, you are also removing spending like charity, which isn't what most people think of when they say "Spending without taxes". This yet another one of those features that couldn't really be implemented correctly, but instead of just saying that they implemented something that is just not right.

Boatnmaniac

Yes, specific taxes categories are excluded. But if you dig into it further it you will see that it is not just the taxes categories that are excluded. You will also see that it excludes any category with a tax line item association so things like deductible healthcare insurance and medical/dental/vision expenses are excluded.

It makes some sense to be able to see what one's expenses are like after taxes have been taken out of the picture but for me it makes no sense to also exclude other non-tax but still tax-related categories.

BTW, many of the reports that are available also have an option on the Advanced tab of the Customize popup that can be checked to show only tax-related transactions which is a different twist from the Spending tab. It would make more sense, I think if the Spending tab would have an option to show only tax-related categories spending than to exclude that data so it would be more like the option that is found in reports. That to me would be more helpful but it would also be redundant because it would then be just like the data you get in the Tax Summary report.

Chris_QPW

Yes, specific taxes categories are excluded. But if you dig into it further it you will see that it is not just the taxes categories that are excluded. You will also see that it excludes any category with a tax line item association so things like deductible healthcare insurance and medical/dental/vision expenses are excluded.

That's what I meant; "charity" was just one example.

Someone didn't understand the "complexity" of that what seems like a simple statement "Spending without taxes" and implemented basically a useless feature. And believe it or not the tax reports aren't much smarter. The tax planner would be the "smartest". If you look at the Tax Schedule report, other than separating out the tax sections (Schedules/Forms) it is just an income/expense report. It doesn't try to separate out "taxes", because frankly it doesn't know. You don't see anything on there that says "tax" or "not tax" other than the text and the user can use whatever text they want for the category.

To make this work there would have to be a list of what tax lines are "tax" and which are "not tax", and they would have to maintain that list. And we all know how good they are on maintaining the tax lists.

Ps56k2

interesting - tnx for the nudge to go poke around -
Looked at the Spending with/without - reviewed some of the entries -
Then went to the Reports - Tax - Tax Schedule - to see all the captured line items

NotACPA

My state doesn't tax income … so we're able to deduct Sales Tax on our tax return.

SO, I split almost every banking transaction to separately record the Sales Tax.

THUS, for me, the OP's request is simple … create an Income/Expense report and exclude that Sales Tax category.

Boatnmaniac

https://community.quicken.com/discussion/comment/20426082#Comment_20426082

I don't see the Op requesting anything. They simply asked a question regarding it how Quicken factors taxes out of that Spending graph view option. At least that is how I understand what the Op posted.

But it's pretty easy to create and save a custom Income/Expense report with sales tax excluded…assuming, of course, that the sales tax is captured in split transactions with a sales tax category. Once the customization is completed and saved in My Reports it will always save the sales tax excluded. I don't see a need to have another default report generated for this since customization is readily available and easy to do.

BTW, my state (TX) doesn't tax income, either. But I'm way too lazy to split out the sales tax for every taxable purchase transaction. I just use the table tax (based upon income) deduction amount. True, it won't show up as sales tax in Quicken reports but I do enter an estimate for it in Tax Planner. The exception to this is when I make a major purchase (like the car I bought in Nov) because then I can deduct the sales tax for this in addition to the table tax amount for everything else so I do split categorize those major purchases.

NotACPA

@Boatnmaniac, YEARS of splitting out my sales tax has CONCLUSIVELY demonstrated to me that my actual Sales Tax paid is MUCH more than those tables allow. Almost double.

Ps56k2

with the $10k limit on SALT - I don't even bother with the Sched A anymore - just going with Std Deduction -

Boatnmaniac

https://community.quicken.com/discussion/comment/20426111#Comment_20426111

Good to know. I'm glad you find value in doing that.

While I do track itemized deductions in Quicken, every year since the standard deduction was increased and limits were placed on how much could be deducted for certain types of expenses, I have never had enough (not even close) in qualified deductions to be able to itemize my tax returns. There really is no incentive for me to spend the multitude of hours needed to record, track and store documentation for the many hundreds of transactions with sales tax each year that might, if I am lucky, save me just a few hundred dollars on my annual tax bill. Heck, we waste more money on that by continuing to have a landline phone (we both have smart phones), with some of the entertainment subscriptions that we have that we don't use all that often and by making unnecessary trips into town when we could have better coordinated to reduce the number of trips (we live 8 miles from the nearest town with limited shopping/services available and 20 miles from the nearest city of any consequence…lots of gas and vehicle wear and tear over the course of a year). So, there's lots of opportunity to save money. It's just a matter of where I want to spend my time vs how much benefit I will get from it. At this time, detailing all my sale tax transactions just is not a good fit for me.

NotACPA

My mortgage alone almost demands that I itemize.

Boatnmaniac

https://community.quicken.com/discussion/comment/20426168#Comment_20426168

I haven't had a mortgage since 7/31/2015. The interest from my last mortgage was relatively insignificant (relative to itemizing) for several years before that. Maybe I should think about getting a new mortgage, huh? 😉

NotACPA

My current mortgage rate is so low, that it's almost like stealing money. I can invest at almost triple that rate.

q_lurker

Well since this discussion has already be so hijacked … I gotta ask

@NotACPA Do you break down your auto fuel fills to separate out the State and Fed gas taxes, or skip that detail since it not so itemized on the receipt?

My estimate for those amounts last year from my overall gasoline bill would have been about $155 state and $120 fed.

NotACPA

Sales tax isn't itemized on multiple receipts … but such tax in my jurisdiction is well known, unlike the gas taxes.

What rate do you use for state gasoline tax (how did you obtain such a figure, since we don't live in the same state)? I'm uncertain as the the state tax on gas being the same as the general rate, since there are multiple sales taxes in my county depending upon what I'm buying.

The general sales tax in my county is 9.25%, but again, there's no income tax.

q_lurker

My research led to an 18.4 cent/gal fed tax and 24 cent state tax = 42 cent/gal total. Saw another table citing a national average of 57.6 total and 85+ max in CA.

I guessed at a $3/gal average and used my total gas expenses for the year to get near the figures I posted.

What I gathered from too little research was that traditional sales taxes (like your 9.25%) don’t get applied to fuel purchases. Obviously that could vary locally.

Chris_QPW

Here is a breakdown for California:

• 54 cents in state excise tax: among the highest in the nation
• 18.4 cents in federal excise tax
• 23 cents for California's cap-and-trade program to lower greenhouse gas emissions
• 18 cents for the state's low-carbon fuel programs
• 2 cents for underground gas storage fees
• An average of 3.7% in state and local sales taxes

As you can see both state and local taxes are there but are much lower than the standard sales tax.