Tax refund should not be included in spending report

Marcin

Currently spending reports show tax refund from IRS as negative spending in other category, lowering the total spend. This makes spending report useless on such months.

EL1234

You can change the category to any Income category, either an existing one or create a new one, and it'll instead count as income in the spending plan

Marcin

Yes but something as common as IRS refund I'd expect to be handled correctly out of the box.

RobWilk

All refunds should be negative spending.

For example, if I return a $10 shopping category expense, the refund cancels out the shopping spending.

You paid the tax money; the refund is because you overpaid; it's not income.

Clark

The correct way to look at it—-It was income you earned to start with, and it should stay recorded as such when your income is returned as a refund.

SRC54

Yes, I do it as negative spending since it is a refund of taxes I already paid. Can't you just tell Spending Plan to ignore it?

You can also record the tax refund as a transfer if you like. Then it gets ignored automatically. This is what I do since I paid the taxes in 2023 and got them back in 2024. I just tag it as a Tax Refund.

I supposed the correct thing to do is to put your tax payments every month into a asset account and then when you file your tax report, you "pay out" what you pay and transfer to your checking account what you get back. But it's too much trouble and Simplifi would choke as it does now on Transfers from your paycheck. 😀

All of this is why I think we should pay flat taxes every month and forget it as we do with Medicare Tax and SS Tax and all other taxes. Then IRS could just concentrate on finding those who avoid paying taxes. Hmm. Maybe not. LOL

EL1234

I suppose if you track taxes paid as spending, this should be considered as negative spend (to counteract what you've spent). I don't track taxes like that, my income is whatever comes via paychecks so if extra taxes were withheld and then refunded, I consider that money as additional income.

Marcin

Exactly, tax refund is just a delayed salary and belongs in income. Including it in spending reports makes spending artificially low and messes up trends.