Budget: envelopes and the tax reserve

The budget answers a simple question: of the money that came in, how much is already spoken for?

✉️ Envelopes

Open Budget and press Create budget. SoloBook splits your income into envelopes of three kinds:

• Spending: money for a purpose, like groceries or the car. Each envelope shows what is Left, or by how much you are Over.
• Savings target: money you want to set aside. It shows Behind target by until you reach it, and then Target met.
• Tax reserve: money you put aside for tax.

Use the arrows to move between months. At the top you see your Gross income, Deductible expenses and Net income for the period.

To make an envelope work, assign personal spending to it when you review a transaction. See Reviewing transactions. Personal spending without an envelope is counted against nothing, so SoloBook points it out and asks you to assign one.

🧮 The tax reserve and the tax estimate

The Tax reserve envelope compares two figures:

• Your reserve (chosen): the amount you decided to set aside.
• Computed estimate: SoloBook’s estimate of what the tax might be.

The difference is shown as a Cushion, if you have set aside more than the estimate, or a Shortfall, if you have set aside less.

The Tax estimate block shows how the estimate is built: gross income, deductible expenses, capital cost allowance (CCA), net income, CPP, federal tax, provincial tax, the total and the effective rate.

Please read this part. The estimate is a planning aid. It is an estimate to confirm with an accountant, not a tax filing. It uses cash-basis figures, meaning what was received and what was paid. And right now it works for Alberta only. For any other province, the screen says it cannot estimate.

⚙️ Budget settings

Edit settings lets you choose your province and enter the home-office remainder carried forward from last year’s filing. Without a province, no estimate is shown, and the screen tells you what to do.

⚠️ Things the budget will tell you about

SoloBook does not hide gaps. On the Budget screen you may see notes that:

• some expenses have no category or tax line, so the deduction may be understated;
• some income is waiting for you to choose a business, so the estimate may be understated;
• some personal spending has no envelope.

Each one has a short explanation of what to do. Fix them and the numbers get better.

The budget’s reserve for a month is that month’s share of the whole year’s total. It is not an instalment calculated by CRA.