Reconciling transactions reimbursing myself for expenses as self-employed (UK)
"For anyone that's curious, I had a number of chats with Quickbooks who recommended I import only the relevant business transactions from my personal account & personal credit card in order to lower the tax liability. This way money ""paid"" from the business account to myself rightly shows up as a transfer and not as income. This means when generating a tax report, it calculates the correct rate of tax to be paid based on income minus allowable expenses, regardless which account they came from." Any money that ScottMcGready gives to the company is a personal loan that must be repaid by the company at some point without tax consequences. Any money that the company gives to ScottMcGready is either salary (Scott pays income tax, company counts this as cost), or a dividend (Scott pays dividend tax), or a loan (Scott must repay the loan).
They are wrong.  If they offer an FSA, they must abide by the rules regarding FSA eligible expenses, plain and simple. They can offer a lower limit than the general maximum ($5K/yr?) and they can allow a grace period on expenses, or not. But, they must allow reimbursements for reimbursable items. Medical Insurance premiums are included. See this comprehensive list.  On the IRS web site, Pub 969 discusses FSAs at a higher level and indicates that Publication 502 has the detailed list of reimbursable expenses. Medical insurance is listed. I offer this chain so one can find the data directly from the IRS and not claim that Wikipedia might not be accurate.  At this point you need to decide how far you want to go with your benefits department on this. Do they offer a copy of what they claim is the accepted list of reimbursables? "See this question regarding the relationship between a HDHP (High Deductible Health Plan) and an HSA (Health Savings Account). In brief, to qualify for an HSA you must have a HDHP: HDHPs are plans with a minimum deductible of $1,200 for self-only coverage and $2,400 for self-and-family coverage. The maximum amount out-of-pocket limit for HDHPs is $5,950 for self-only coverage and $11,900 for self-and-family coverage. As mentioned by Stainsor, your insurance can either come from your employer, or it can be an individually purchased plan. The HSA can be bundled as part of a package with the insurance, or it can be an account you set up separately. Contributions you make to the HSA are tax deductible. You'll report the amount you contributed when you file your taxes the following year. E.g. in April 2012 you'll report (and deduct) the amount of HSA contributions you made for tax year 2011. I'm not sure what kind of trouble you'll get into if you have an HSA without having a qualified HDHP. To answer the main part of your question: Different HSAs may have slightly different features, but I've typically seen them provide the following ways to withdraw funds: Via a debit card issued with the account. You can use the debit card to pay for things like drugs at the pharmacy, or at a doctors' office that requires payment at the time of service. Via online bill pay. You can use this to pay bills from hospitals, doctors' offices, or other healthcare service providers that send you bills. Via paper checks. For doctors' offices that require payment at time of service but don't accept plastic. (Or if you prefer not to use online bill pay.) Via withdrawal at a teller window or ATM. You can use this to ""reimburse yourself"" for healthcare expenses that you paid out of pocket. The issue of documenting legitimate expenses and/or qualifying for the account with an HDHP is between you and the IRS. The bank at which your HSA is kept doesn't really care whether you comply with the tax laws." Given your needs, GNUcash will do swimmingly. I've used it for the past 3 years and while it's a gradual learning process, it's been able to resolve most stuff I've thrown at it. Schedule bills and deposits in the calendar view so I can keep an eye on cash flow.  GNUcash has scheduled payments and receipts and reconcilation, should you need them. I prefer to keep enough float to cover monthly expenses in accounts rather than monitor potential shortfalls.   Track all my stock and mutual fund investments across numerous accounts. It pulls stock, mutual and bond quotes from lots of places, domestic and foreign. It can also pull transaction data from your brokers, if they support that.  I manually enter all my transactions so I can keep control of them. I just reconcile what I entered into Quicken based on the statements sent to me. I do not use Quicken's bill pay There's a reconciliation mode, but I don't use it personally. The purpose of reconcilation is less about catching bank errors and more about agreeing on the truth so that you don't incur bank fees. When I was doing this by hand I found I had a terrible data entry error rate, but on the other hand, the bayesian importer likes to mark gasoline purchases from the local grocery store as groceries rather than gas. I categorize all my expenditures for help come tax time. GNUcash has accounts, and you can mark expense accounts as tax related. It also generates certain tax forms for you if you need that. Not sure what all you're categorizing that's helpful at tax time though. I use numerous reports including. Net Worth tracking, Cash not is retirement funds and total retirement savings. Tons of reports, and the newest version supports SQL backends if you prefer that vs their reports. "Being self employed just means you fill out some more forms in your annual self assessment for your ""profit"" from being self employed.  Profit = all the money you receive, minus any tax deductible cost that you spent for making that money (and all the cost must be documented, which means you have a folder with all the receipts and keep it safe). You pay normal income tax on all the profit, which means it is just added to your taxable income. What you do with the profit is up to you; you don't pay yourself a salary, just take the money (make sure you leave enough to pay your taxes)." Source on GOV.UK You may be able to get tax back for some of the bills you have to pay because you have to work at home on a regular basis. You can only claim for things to do with your work, eg business telephone calls or the extra cost of gas and electricity for your work area. You can’t claim for things that you use for both private and business use, eg rent or broadband access. You don’t need to provide records for claims of up to £4 per week (£18 per month). For claims over £4 per week you’ll need to provide evidence of what you’ve spent. Claims up to £2,500   You must claim using a Self Assessment tax return if you already fill one in. If you don’t already fill in a Self Assessment tax return, and your allowable expenses are under £2,500 for the tax year, fill in form P87 and send it to the address on the form. If you’ve made a successful claim in a previous tax year and your expenses are less than £1,000 (or £2,500 for professional fees and subscriptions), you may be able to make your claim by phone. Claims over £2,500   You must claim using a Self Assessment tax return. If you didn't receive the money in 2012 or have constructive receipt you really can't claim the income. If the company is going to give you a 1099 for the work they aren't going to give you one until next year and if you claim it this year you will have a hard time explaining the income difference. On the other hand if this isn't miscellaneous income, but rather self employment income and expenses you should be able to claim the expenses in 2012 and if you have a loss that would carry over to 2013. Note it is possible to use an accrual basis if you are running a business (which would allow you to do this), but it is more complex than the cash accounting individual tax payers use. "Doesn't make any difference.  Reconciling is important, but if you are constantly checking the online balance in between (because you are NOT keeping track of a running register balance) then the fact that you *eventually* ""balance"" is irrelevant...  And in fact if you're NOT maintaining a register, then you're really not ""reconciling"" (or ""balancing"") anything.... you're just looking over a bank statement and saying *""OK that looks right""*; or, as is more likely in your case saying *""Waitaminute, that's not right ... Oh, I guess I forgot about that transaction... and that one... and that other one.""*" It depends on what you paid for, but usually audit support is an unrelated engagement to the return preparation. If the accountant made a professional mistake, you can request correction and compensation from that accountant, other than that any accountant can help you with audit regardless of who prepared the return. The original accountant would probably be better informed about why you reported each number on the return and how it was calculated, but if you kept all the docs, it can be recalculated again. That's what happens in the audit anyway.