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Something that's not specifically mentioned is that, as far as I can tell, the author is a single freelance developer. Most people don't need a bookkeeping sys

Something that's not specifically mentioned is that, as far as I can tell, the author is a single freelance developer. Most people don't need a bookkeeping system, a simple budget application is enough to handle personal finances. It's been a while, but the last time I looked, GnuCash's budget system wasn't fully thought out. The other aspect to this is that as the situation starts to become more complicated, doing it yourself stops making sense. Adding in children, a house, employees, etc, increases the chances of making a mistake and then having to go through an audit, which is expensive and time consuming. It's a better strategy to find tax accountant (local) and work with him to make sure the IRS has no need to investigate you.

TheAdamAndChe 9y ago
This depends entirely on how your business is structured. I'm pretty sure the way GnuCash recommends handling business accounts is to have a completely separate GnuCash file for your business, then pay yourself under the Income category with that business and use that as a normal salary income. The complete separation makes tracking everything much easier.
- jldugger 9y ago
  IDK what GNUCash recommends but keeping separate books is literally the first factor the IRS uses for distinguishing hobby vs business income: https://www.irs.gov/pub/irs-utl/irc183activitiesnotengagedinforprofit.pdf https://www.irs.gov/pub/irs-utl/irc183activitiesnotengagedin...
nickjj 9y ago
While I am a single freelance developer, things wouldn't change much with a family. Also GnuCash has heaps of documentation on dealing with employees / payroll. I think it would be pretty easy to pull off with a couple of employees. Not sure about beyond that, but honestly, it's a non-issue. Worrying about that would be like worrying about how to operate at Google scale when you haven't even developed your product yet. For the record I still goto an accountant every year. I just bring him the reports that GnuCash created. Unless you hire a personal bookkeeper you're always going to be responsible for totaling up your own income for taxes no matter what you use.
- Delmania 9y ago
  > While I am a single freelance developer, things wouldn't change much with a family. I disagree with this statement because this claims assumes you keep up to date on tax code changes. Getting married, buying a house, and having a child now add in deductions for mortgage interest, child tax credits, child care tax credits, a first time home buyer's loan, and potential changes to your bracket because of your spouse and how you file. Taxes for an individual with 2 kids, a house, and business are definitely more complicated than taxes for a single individual who lives in an apartment. At some point, you have to ask if this is worth your time as opposed to getting work done, especially seeing as how demonstrated in the past year, the government can radically change the tax code.
  - nickjj 9y ago
    > I disagree with this statement because this claims assumes you keep up to date on tax code changes. Getting married, buying a house, and having a child now add in deductions for mortgage interest, child tax credits, child care tax credits, a first time home buyer's loan, and potential changes to your bracket because of your spouse and how you file. Taxes for an individual with 2 kids, a house, and business are definitely more complicated than taxes for a single individual who lives in an apartment. At some point, you have to ask if this is worth your time as opposed to getting work done, especially seeing as how demonstrated in the past year, the government can radically change the tax code. Those are all questions you would ask your accountant. But from GnuCash's POV, it's just entering in more transactions per year into their various account buckets.
  - deleted 9y ago
    [deleted]
jldugger 9y ago
Honestly, all personal budget systems I've tried are crap. I use two systems: 1. Annual budget spreadsheet. A simple high level of what my planned income is and what my planned expenditures / investments are. If there's anything fundamentally wrong about my plans, it's caught here. 2. GNUCash for transaction history plus 90 days of forward looking planned transactions. If there's a projected account shortfall, I can rebalance accounts, and determine whether this is a temporary cash flow problem or if I need to adjust my annual budget. This setup works fairly well for me, though a tax accountant will still be useful in navigating things like what is and isn't a deductible expense, what documentation is required, and how to adjust your future plans to become more tax efficient.
- astura 9y ago
  My personal budget is extremely simple and very, very effective: 1) Take my desired savings and investments rate off the top with automatic paycheck deposits 2) Spend the rest freely If I feel like I'm running out of money, I'd have to go back and evaluate my expenses to see where I could improve my spending. I also do separate auto deposits to a separate account if I'm saving for a big purchase. The only other categorizing I do is I have a special account for house related expenses.
- Delmania 9y ago
  I found YNAB to align the most with how I think about budgeting. Zero-dollar, category based that only focuses on the amount of money you have now and not to worry about cash forecasting. However, your description sounds like you need a bit more of an accounting and budget application than a strict budget.
deleted 9y ago
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TheAdamAndChe 9y ago

This depends entirely on how your business is structured. I'm pretty sure the way GnuCash recommends handling business accounts is to have a completely separate GnuCash file for your business, then pay yourself under the Income category with that business and use that as a normal salary income. The complete separation makes tracking everything much easier.

jldugger 9y ago
IDK what GNUCash recommends but keeping separate books is literally the first factor the IRS uses for distinguishing hobby vs business income: https://www.irs.gov/pub/irs-utl/irc183activitiesnotengagedinforprofit.pdf https://www.irs.gov/pub/irs-utl/irc183activitiesnotengagedin...

nickjj 9y ago

While I am a single freelance developer, things wouldn't change much with a family. Also GnuCash has heaps of documentation on dealing with employees / payroll. I think it would be pretty easy to pull off with a couple of employees. Not sure about beyond that, but honestly, it's a non-issue. Worrying about that would be like worrying about how to operate at Google scale when you haven't even developed your product yet. For the record I still goto an accountant every year. I just bring him the reports that GnuCash created. Unless you hire a personal bookkeeper you're always going to be responsible for totaling up your own income for taxes no matter what you use.

Delmania 9y ago
> While I am a single freelance developer, things wouldn't change much with a family. I disagree with this statement because this claims assumes you keep up to date on tax code changes. Getting married, buying a house, and having a child now add in deductions for mortgage interest, child tax credits, child care tax credits, a first time home buyer's loan, and potential changes to your bracket because of your spouse and how you file. Taxes for an individual with 2 kids, a house, and business are definitely more complicated than taxes for a single individual who lives in an apartment. At some point, you have to ask if this is worth your time as opposed to getting work done, especially seeing as how demonstrated in the past year, the government can radically change the tax code.
- nickjj 9y ago
  > I disagree with this statement because this claims assumes you keep up to date on tax code changes. Getting married, buying a house, and having a child now add in deductions for mortgage interest, child tax credits, child care tax credits, a first time home buyer's loan, and potential changes to your bracket because of your spouse and how you file. Taxes for an individual with 2 kids, a house, and business are definitely more complicated than taxes for a single individual who lives in an apartment. At some point, you have to ask if this is worth your time as opposed to getting work done, especially seeing as how demonstrated in the past year, the government can radically change the tax code. Those are all questions you would ask your accountant. But from GnuCash's POV, it's just entering in more transactions per year into their various account buckets.
- deleted 9y ago
  [deleted]

jldugger 9y ago

Honestly, all personal budget systems I've tried are crap. I use two systems: 1. Annual budget spreadsheet. A simple high level of what my planned income is and what my planned expenditures / investments are. If there's anything fundamentally wrong about my plans, it's caught here. 2. GNUCash for transaction history plus 90 days of forward looking planned transactions. If there's a projected account shortfall, I can rebalance accounts, and determine whether this is a temporary cash flow problem or if I need to adjust my annual budget. This setup works fairly well for me, though a tax accountant will still be useful in navigating things like what is and isn't a deductible expense, what documentation is required, and how to adjust your future plans to become more tax efficient.

astura 9y ago
My personal budget is extremely simple and very, very effective: 1) Take my desired savings and investments rate off the top with automatic paycheck deposits 2) Spend the rest freely If I feel like I'm running out of money, I'd have to go back and evaluate my expenses to see where I could improve my spending. I also do separate auto deposits to a separate account if I'm saving for a big purchase. The only other categorizing I do is I have a special account for house related expenses.
Delmania 9y ago
I found YNAB to align the most with how I think about budgeting. Zero-dollar, category based that only focuses on the amount of money you have now and not to worry about cash forecasting. However, your description sounds like you need a bit more of an accounting and budget application than a strict budget.

deleted 9y ago

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