QuickBooks (QB) is one of the top choices for small businesses to do their accounting. It is also very integrated with TurboTax (available with a popular bundle discount) as it tracks many job-related costs that have a significant impact come tax reporting time. QB has evolved over time and has realized the growing demand from contractors and freelancers for doing the accounting. It responded by constantly finding ways to eliminate manual steps and automating expense reporting with the growing presence of technology.
So, what exactly can QuickBooks Self-Employed do for you?
Each day entrepreneurs have to do more with less. When starting a business or just reporting income from a side job, the whole burden of tracking income, expenses, and accounting for it falls on your shoulders. QB helps to integrate those steps into your daily routine. And with more and more of those steps automated, reporting your business accountings is not only doable but also exciting and informative. The Self-Employed version encompasses all aspects of accounting, with the focus on four categories: Transactions, Mileage tracking, Invoices, and Taxes.
This product not only helps to properly account for your business income and expenditures, but provides a great help when it’s time to report that information to the IRS. It is very easy to migrate the relevant tax information into TurboTax. Consequently, TurboTax will automatically populate the proper fields, check for credits and deductions ensuring the maximum refund.
Here are some additional details on the main categories of QB Self-Employed.
Transactions – link you bank account (or credit card, PayPal, Square) to QB to see all your transactions there. When you clink on a transaction, you can categorize it as Business, Personal, or you can split it between the two. If you expect certain purchases always be associated with either of the two categories, you can create a rule to label purchases from certain vendors as business or personal and don’t have to answer these questions each time. Rules can also determine a type of category, i.e. office supplies, meals, etc. Another great feature here is ability to attach receipts. You can take a picture, or add from your library of digital files, and not worry about organizing your receipts throughout the year or worry about the losing some of them. Each receipt can be accompanied by a personal note with more details related to the purchase. All transactions are split between Reviewed and Unreviewed ensuring that you don’t miss anything. You can also go back to the reviewed transactions and make changes if necessary. Any cash transaction can be added manually.
Mileage tracking – using the mobile app will automatically track and record all the trips that you make. Your trips are tracked using your phone’s GPS. Automated mileage tracking can be easily disabled whenever it is not required. If you miss a transaction, you can just as easily add it manually. Similar to transactions review, you go through all of the trips to categorize them as business or personal. This is great for ride sharing business as one of the easiest ways to ensure accurate and complete reporting. This will become indispensable when it comes to report taxes by having all the necessary input to calculate gas, wear and tear, etc.
Invoices – this is a very simple and quick way to present your clients with simple and professional invoices. A built-in invoicing feature has an input page gathering information such as client details, what products or services were provided, and at what rate. It then generates an invoice presenting all those details in a very professional manner. This feature lets your customers make payments with a credit card or via bank transfers, and therefore eliminating need to write checks. This also gets money in your account quicker. Finally, stay on top of collections by reviewing any open invoices and send past due notifications.
Taxes – the two biggest productivity features here are payment of estimated quarterly taxes and preparation of annual tax returns. When you start working on your business, you have to start paying estimated taxes. QB tallies up all your business income and expenditures you reported, and makes an estimate of how much and when to make the payment.
The second part is to use all this information when filing your taxes. It syncs with TurboTax that automatically populates all the right fields. You can also export and use this information if you have an accountant prepare your taxes. Not only you save time reporting income to the IRS, but you’re more likely to capture all your business costs, which leads to greater refunds.