Income Tax Payments & Credit Lines
Just moved over to new YNAB. Previously we set aside money for income tax installments by taking a % of each business draw and making a payment to a credit line that we use specifically for paying taxes. This helps keep the balance lower as we had a balance before for an initial tax payment instead of having it sit in a bank account.
However, the new YNAB counts it as a payment but when an installment is due, the new YNAB needs a category, and then allocates the say $1,000 to that category against that months spending. Is there a way to do both a category and keep the transferring to the credit line? Or should I take that credit line offline?
Hi J. Kerr !
How is that credit line currently entered in your budget? It sounds like it may be a Tracking account (which is why the transfer would ask for a category). The funds in your checking account should be budgeted towards a "Tax Installments" category, so that when you enter the transfer to the Tracking account you can use that category.
If that's not how things are set up, let me know and we can take another try at it! :)
So, you're using new income to pay off past debt. And you seem to not be reserving cash for your upcoming taxes.
If you realize that and that's your choice, then so be it. Your budget, your priorities.
YNAB is a plan for your cash. That's why it wants you to budget for the debt reduction -- you're sending them your cash. That's why it also disappears out of the category/budget. Dollars can only be spent once.