Interest from Savings Account

Google Sheets
1

How are people handling interest from savings accounts. With these high yield savings account the interest earned from them is not insignificant. What I have decided to do is show that as income and treat it like a slush fund if one of my categories go over.

I would like to hear how others are handling these transactions

2

I have a category Investments under the Income type. This is my first time tracking them this way and it will be nice to see how much comes after a whole year with rates these days.

I used to just have it as Investment (category) Transfer (type) but you can’t really see the EOY data that way.

3

I have an income category called Cash Back. I put my interest earned in there as well as the cash I get back on my cash earning credit cards.

4

I group mine in with the random refund checks that i sometimes receive throughout the year and have an income category for this called other income similar to @susandennis

But with my cashback i usually redeem it for a specific purchase so I’ll categorize it the same as the purchase to offset the cash flow.

5

I break my income into ‘Earned’ and ‘Unearned’ groups and then have the following categories, with one specifically for interest:

  • Income
    • Earned
      • Wages Her
      • Wages Him
      • Income Her
      • Income Him
      • EarnedIncome
    • Unearned
      • Cashback
      • Dividends
      • Interest
      • UnearnedIncome
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6

I also break my income into two groupings, “SALARY & WAGE INCOME” and “OTHER INCOME”. I actually have three interest income categories since each is treated differently.

  • SALARY & WAGE INCOME
    • Commissions/Bonuses
    • FSA/HSA Contribution
    • Gross Salaries & Wages
    • Less: Federal Tax Withholding
    • Less: FICA - Medicare Tax
    • Less: FICA - Social Security Tax
    • Less: State Tax Withholding
  • OTHER INCOME
    • Business Income
    • Cashback Rewards
    • Credit Card Benefit
    • Credit Card Offer
    • Dividend Income - Brokerage
    • Federal Tax Refund (Reimbursement)
    • Gift Card Income
    • Interest Income - Checking & Savings
    • Interest Income - Escrow
    • Interest Income - Health Savings Account
    • Other Miscellaneous Income
    • Other Reimbursements
    • Rental Income
    • State Tax Refund (Reimbursement)
    • Stock Sale Proceeds & Cap Gain Dist - Bkg
7

I do a little different, I do have an Interest Income and Reimbursed Fees as part of Other Income, but for Federal Tax refunds, I still use the expense category of Federal Tax payments since the refund isn’t really income but a reimbursement of expenses paid. Ultimately, the refund amount should be as close to 0 as possible, so I didn’t break it out as a cat since I didn’t want to include it as income.

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9

I do the same. I have categories for federal and state tax deductions that come out of my paychecks, and I use the same categories for yearly federal/state refunds/payments.

10

This touches on another question I posted about tax expenses/refunds and I have created an expanse category for that as well. I am curious why you have decided to track your tax deductions as expenses. I assume then you must show income coming in as gross income. I usually just track net income in tiller. Appreciate your feedback.

Thanks,

11

If I bought a TV I might categorize it as “Electronics”. If I then returned that TV because something was wrong with it, I’d put the refund in the “Electronics” category as well to offset the expense. Taxes are an expense, and a tax refund is simply returning an overpayment to you. Including the refund in the same category as the deductions allows you to see how much you actually paid in taxes over the year.

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12

I use the Paycheck Deduction Transaction Generator which allows you to track your full paycheck. In this case, paycheck taxes are expenses (not just hidden from view until taxtime).

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13

for Federal Tax refunds, I still use the expense category of Federal Tax payments since the refund isn’t really income but a reimbursement of expenses paid.

You know, that’s a good way of looking at it, especially for those of us who are splitting out our gross paychecks and have the federal/state withholding logged in our transactions. Maybe I should update my tax refund categorization. :slight_smile:

14

I have a Dividends/Interest category for any cash dividends or interest that add to the available cash balance. If the dividends are auto reinvested, then I mark them as an Investment Transaction (which I have marked as Hide). Cash rebates from credit cards are in my Rebate category. Both categories are in my Income group.

As for Federal Tax payments, I also have them as expenses but I tag them with a tax year because we make an estimated payment in January for the previous year, and in April we have either another previous year payment or refund. I can then go to my Tags Report and see the actual tax amount for a given year.

15

Hi @jpfieber - I am trying out your paycheck generator to see if it is something I want to use. I do have some quesiton(s).

Looks like I have correctly added the transactions to my transaction tab and it appears my savings budget is populating correctly. I now have entries in my budget for every deduction shown in my paycheck as an expense.

  1. Do you like to keep these visible and grouped together as their own group similar to “living”, “discretionary”, “bills”, etc…
  2. Do you also allocate a budget for these or just let them show red?
  3. Related to income, I show a new category “Gross income”, but it doesn’t show up in my savings budget, not sure why, so trying to trouble shoot that, maybe you have an idea.
  4. Just wanted to clarify something since I am used to only tracking my net income. Since I now have an expense for each deduction, I will see my gross income and my expenses will for the deductions will go against that to come out to a net even though I don’t have an explicit entry shown as net income.
  5. Also, not to go into details, but for the months of Jan, Feb…my income was a transfer from another account and not my full income so I am not sure how to handle this since those entries are “net income” and won’t have a corresponding gross or not pay entry from the paycheck generator…so my income looks a bit squirrelly at the moment. Any thoughts?

Thanks,

16
  1. I use a ‘Paycheck’ tag on each item, and the ‘Account’ and ‘Institution’ are set the same, so I can always locate them as a group in one of those ways.
  2. I do create line-items in my ‘Budget Plan’ mostly because they’re easy and predictable, and as a reminder that they exist.
  3. We don’t create that category, so it must be something you created. Check in Section 2 of the Paycheck Generator template so see what categories you assigned to each of your deductions.
  4. You should have an explicit entry for net income, it would be the transaction of your paycheck arriving at your checking account. It should be categorized as a transfer, as would the negative net pay transaction you create in the Paycheck Generator. These offset so only the Gross Pay transaction from the Paycheck Generator is used as income, with all deductions subtracting from that.
  5. If it was transferred from another account, it can’t be income since you already had it, you must moved it around. Income would only be new money arriving in an account.

Hope this helps!

17

Thanks again. Sorry for all the questions and having them come in piecemeal. They come up as I get into this more. Currently I have the gross income categorized as “income”, all taxes and health insurance as an “expense” but wasn’t sure about what to do with things like 401K and regular reimbursements. For the reimbursement, I was thinking about showing it as income and then categorizing it under the same category as the expense it aligns to, but then thought tiller might get confused if a category is shown as “income” and “expense”. The solution I am thinking is to show it as its own category, say “cell phone reimbursement” and then just doing a budget transfer once a month to my cell phone expense item.

Thanks,

18

I’m not sure how the paycheck deduction sheet works but with some solutions using the same category for both inflows and outflows can confuse things. The other thing is that it could end up netting the category to $0 so probably better to create a separate category for the reimbursement as an “income” or just use both sides as “transfer” since really that’s what it is.

19

In the case of a work expense, I at least expect the gas/hotel, etc. to be $0. If it’s not that means I either under or over expensed it.