Hi all,
Every year we end up paying some non-negligible taxes on account of some gigs (my spouse’s freelancing, royalties, etc). In Tiller, initially I’ve set up “Tax Payment” as an expense category under the group “Tax”. However I wasn’t pleased with that setup. Tax payments appear in Tiller as a large expense that I can’t budget or reduce meaningfully - at least not with means that apply to most spending. Furthermore, taxes are in a way (though there’s debate of principles around this) “the cost of doing business” so logically they should appear as a decrease of the money you make from your business.
So I decided to classify “Tax” as “Income”. They are still negative, so they are effectively subtracted from whatever income you have, and the total income nicely shows you your usable money.
Also, based on the same reasoning, I am also categorizing 100%-deductible expenses (equipment, office supplies, software) as negative income. Again, this is money spent to help you make money so they are a different kind of expense and more like a deduction from whatever revenue you made. If you spent $200 on some video editing software to make $2000 on a contract, it stands to reason that the net money you made is $1800. This is quite in contrast with you making $2000 from which you spend $200 on a new coat.
I was glad to notice Tiller isn’t bothered by all that. One problem I noted is there are some community-provided tools (such as “Spending Trends”) that do not support negative income. I changed the sheet to show a sparkline of the absolute value in red (as opposed to green). That looks nice, but I’d prefer sparklines that show negative values on the left and positive values on the right.
Is this"negative income" thing commonly done? Any other pros and cons? Thanks!