End of Year Review

Well, every year it seems like I find myself asking if there is a better way to manage my budget and here I am again.

This year I tried tracking gross income and the various deductions (401k, dental, medical etc…, and fed and state taxes) using the paycheck deduction calculator and I am struggling with a few things

  1. I decided to track bonus income separately from base income. This may be unnecessary and I am curious how people track bonuses in tiller.
  2. Since I technically may not receive a bonus I try not to budget for it, but I have received it nearly every year I have been working, so I am curious how others deal with bonus income. Do you try to budget for it in the income side of your budget or do you not account for it and show it as an income surplus in your budget.
  3. Using the paycheck deduction calculator you can track all your deductions and I created a budget category for all these deductions against gross income. Many of these I estimated when I put my budget together and if I don’t adjust the budget category slightly every month I will show either a surplus or deficit in my pay check deductions. I am curious how others are dealing with that. Should I make slight adjustments every month so that the taxes and deductions in my budget match exactly what is shown in my paycheck?

So I can see some benefit to tracking gross income against all expenses include payroll deductions, but I am not sure if its worth the effort. If anybody has thoughts and experience I would appreciate it.


We’ve always budgeted Bonuses as its own Income type under Group: Secondary Income. And, for us, it was always its own paycheck with its own deductions, so I essentially treated it as another pay day using the Paycheck Deduction Calculator. Worked fine.

I also budget for each deduction as it’s own line item simply because you have to if you are going to track at Gross Income level vs Net Income level. To set the Categories, I simply copy forward the most common allocation I see every month and then using the Savings Budget I simply tweak it to the right number at the end of every month. Typically, I had to tweak Federal Income, SS, and Medicare by a few dollars here and there but with the Savings Budget sheet it’s really easy and fast to do.

If you want the full picture of your tax impact and what you pay for benefits, then I say it’s worth it.

Just for a different approach: I also use the Paycheck Deduction Calculator, but I hide all of the pre-tax deductions so they don’t appear on my Savings Budget or any other budget sheets. These aren’t things that I can very easily modify, especially on a month-to-month basis, so I find they just add clutter to my Savings Budget. If I ever want to check what I’m spending on any of those pre-tax deductions, it’s easy enough to run a report on those categories. In other words, I track everything, but I budget off of post-tax income.

@YouBet96 Thanks. I am going to look into how you treat bonus income to see if that would work for me. So if you do this do you also track bonuses from taxes as a separate “bonus” category?

On the deductions, what I have been toying with is having all fed deductions (income, social, Medicare) as its own “Fed” category and then tagging them as their own thing and doing the same with states taxes as well as the pre tax deductions. The reason I was thinking about doing this is that when I get a refund or a tax payment at the end of the year they are not broken out in the same detail as they are when they come out of the pay check. So if I had a tax payment due to the IRS, I would just categorize it as “Fed”. Its not likely I will have a refund, but I am curious how you all handle that. I was thinking that if I have a refund I would give it a category and just rebalance that refund across my other budget categories. Curious your thoughts on this.

Your comment about tweaking the categories at the end of each month makes sense to me…thanks .

@dmetiller. I hadn’t thought about this. I had originally wanted to track my 401k deductions to ensure my total budget balances (Gross Income - 401k - taxes - Expenses = 0). Technically the 401k isn’t an expense, but instead a transfer so I am still struggling how to handle that line item. My contributions appear in Fidelity as a combination of my contribution and my employers match, so the transfer won’t balance out. So, I am trying to find a way to show it as a budget items just from a budget balancing perspective, but really don’t want to do anything else with it. Sometimes I feel like I just complicate things…LOL.

I am curious how you all handle dental, vision and medical payroll deductions. I have a “medical” category" with a budget, but had not considered having the payroll deductions go against that budget line item.

So, as you suggest, I think there’s a limit to how crazy one can get with this. I tinkered a bunch today. Here’s how I have things set up at the moment:

-I have separate expense categories for each of my pre-tax deductions, including all the taxes and benefits. So, Social Security, Medicare, Fed Income Tax, State Income Tax, Medical Insurance, HSA, Retirement Contributions, etc.

-If I get a refund, I’ll assign it either to Fed Income Tax or State Income Tax. It’s not perfect, but it’s close enough. My wife and I have separate incomes, but file jointly, and figuring out how most accurately to assign any refund we get is a rabbit hole that I’m pretty sure that I don’t want to go down.

-For the retirement account contributions, I treat those as an expense category in the Paycheck Deduction sheet. I then have a “Retirement Contributions - In” income category to which I assign the transaction when the money shows up positively at Fidelity. That category is hidden within a group called “Investment Income” (that also includes a category for dividends), so it doesn’t mess up my spendable budget. As you say, at least one missing piece there is that it doesn’t separate my own contributions from my employer’s matching contribution, but I’m not sure that it’s worth it for me to get into that level of detail.

Not sure if that workflow makes any sense or if I’ve just tied myself into knots. I’m not an accountant, but I had a decent night’s sleep last night. :man_shrugging:t2:

I’m just going to post directly from my Categories sheet so you see what I do:

Keep in mind I’m starting with Gross Income and am using the Paycheck Deduction Calc logic where your Net Pay ends up being a Transfer In on your Transactions sheet (not shown here):


For the following, I keep a separate Budget sheet called BudgetPlan_Income. Within that sheet I keep multiple types of recurring income streams that aggregate up to one Category. For example, on that sheet I have multiple line items that all add up to a monthly total for Refunds. One of those line items would be Federal Income Tax refund, if I was getting those. My Refunds line item here on the Categories sheet then simply pulls the total monthly number from that sub sheet.

A snapshot of my Insurance and Investment categories. Dental, Medical, Vision, and 401k would be deductions in the Paycheck Calculator. My IRAs and Taxable Investments categories have supporting sub sheets since I have multiple line items that aggregate up to those.


My other paycheck deductions here for Fed Tax, Medicare, and SS. Federal Tax - OOP is our annual out of pocket tax bill we typically pay vs getting a refund.


Hope this helps!

No, the deductions on the Bonus Paycheck flow into the existing line items I shared so that would be Federal Tax, Medicare, and SS. I don’t see a reason to separate those as their own Bonus deductions.

Actually, deleting my previous comment. I was wondering why you keep a separate sheet for income, but then I remembered that the origins of this whole discussion was about how to handle bonuses. Carry on. . .

Thanks for taking the time to post this. Hope you don’t mind if I ask a few more questions.

It sounds like you have 3 different income categories.

  1. Primary income (gross pay / net pay)
  2. Secondary Income (gross bonus / net bonus)
  3. Income from BudgetPlan_Incom (refunds, dividends, etc)

For the BudgetPlan_Income how does that sheet work? Do you have various income streams that sum up to some value similar to below:

Refunds: 500.00
Dividends: 1000.00
Rental Income: 1000.00
Total: 2500.00

Does that $2500 then get reflected on your budget sheet, so your budget sheet might look something like:

Primary Income: $20,000
Secondary Income: $10,000
Income BudgetPlan_Income: $5,000

I assume that the primary income occurs on a regular basis monthly, but the bonus might come in just a couple times a year and you put that in your budget where you think it will hit as well the other income.


Glad to help!

Our 3 different Income Groups are:

  1. Primary - Gross and Net Pay from day jobs
  • Our Primary Income are our paychecks and that’s it. So, all income and deductions in the paycheck go directly into the Categories sheet since that is a recurring, monthly item that is known.
  1. Secondary - Bonuses, Consulting, Asset Sales, Interest
  • I keep Bonuses in our Secondary Income group because ours is slightly complicated. My wife has a Short-Term Incentive (STI) cash bonus that she gets once per year and the amount is variable and she also gets a Long-Term Incentive (LTI) bonus that is RSUs + Cash.

  • We don’t know what the STI dollar figure will be until we get it but since it is a one time event, I plug an estimated number for the STI directly into Categories sheet for the expected month it will hit.

  • For the LTI, I build that out in the BudgetPlan_Income sheet since it consists of two components. Example using the following…on the main Categories sheet my wife’s LTI category would show $20,000 for March but it’s broken down on the BudgetPlan_Income sheet like so. On the Categories sheet, the LTI category is set to =‘BudgetPlan_Income’!B4 starting in January and dragged to the right.


  1. Transfer In - Refunds, Reimbursements
  • For the remaining Secondary and Transfer In categories, if there are multiple incoming streams that feed one Category on the Categories sheet, then I build all of that out in the BudgetPlan_Income sheet as well to keep the main Categories sheet aggregated and clean.

So, I only have the one BudgetPlan_Income supporting sheet that serves all Category line items for each of the 3 Income groups. This is why you see Refunds (Transfer In) in example above along with the LTI (Secondary Income).

Your example is correct except it looks like you are aggregating up to the Group column when I’m aggregating up to the Category column.

Sounds complicated all typed out but it’s really not. Hope it makes sense.

I am curious about the RSU. For my RSUs they vest annually. For these I receive dividends and also when they vest they show up as income and are grossed up to cover taxes. Is that why you track the RSUs as income?

On the refund section. What I have usually done is when I receive a refund for a return or something I just put it in as the category it came out off. Why do you like to show them coming in as income?

For RSU’s, we’ve always sold them immediately upon vesting and then either turn around and reinvest them into something else or use the cash. We try not to carry too much company stock but that’s just a personal investment philosophy. My wife’s career was shaped by Enron so there you go :smile:

You know, that’s just what I’ve done on refunds. So you are basically just putting it right back into the same category and offsetting it there. That could more sense I think.

I agree with that approach when it comes to company stock. I was just curious since you showed it above. My company issues RSA and when they are vested they show up as salary as a Net 0 income to account for taxes, so I was curious if that was why you show them.

I posted this in a different topic, but curious how you handle some of these income streams that are less predictable. For example, I mentioned a bonus and dividends. I have an estimate for these and I was thinking the best approach would be to true these up once they come in so they don’t show up in my budget as a surplus or deficit. Curious how you handle that

For bonus and dividends, yes I just put an estimate in and then true them up when they actually hit.

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Thanks for starting a great conversation here!

For income outside of base salary, I have it categorized as “Other income” and leave notes where applicable but leave no “budget” for it.

For investment income specifically, I have an “Investment Income” category too.