Quickbooks Self-Employed
Many individuals who have a side business or are self-employed/independent contractors do not use accounting software due to reasons such as cost, complexity or time. These people may be consultants, Uber/Lyft drivers, personal trainers, hair stylists, realtors, etc. Intuit has created a cheaper, more basic, user-friendly version of Quickbooks for these people to better manage their business expenses called Quickbooks Self-Employed (QBSE). QBSE helps users to easily track their expenses throughout the year, which can save you money when tax time comes along. Here are some of the biggest benefits and features of QBSE:
Estimated quarterly taxes – QBSE is the only Quickbooks program that will help you to calculate your estimated quarterly taxes, which can be difficult for small businesses to calculate. The program takes into consideration your business income/expenses as well as personal tax considerations to estimate what you should pay in estimated taxes. It also gives you the opportunity to customize your projections for the year to get an accurate picture of your taxable income for the year.
Ease of use – In general, Quickbooks is a user-friendly program, but some of the more advanced versions of Quickbooks can have many different features that someone who does not have a background in accounting can find confusing. QBSE takes the ease of use to another level, particularly with the mobile app. Once you connect your bank accounts and credit cards, it is very easy to categorize an expense as personal or business. The program already has accounts set up which correspond to the different line items in the Schedule C. This makes it that much easier when it comes time to prepare your tax return for the year as you can simply run a report that will already break out your expenses by expense type. You can also create rules where certain expenses are automatically recorded into an expenses category or as income or personal expenses. This reduces the amount of oversight required by you.
Cost – When it comes to cost, QBSE is as cheap as you can get. If you open an account on your own, the cost is typically $10/month. You can find promotional offers that will last a year for cheaper, but I can offer you an even bigger discount as a Quickbooks Pro Advisor. Contact me today to find out more.
Miles – If your business is one that requires you to travel to clients or different job sites, QBSE makes it very easy to track mileage for these jobs. The mobile app also has the ability to track your miles for you automatically using GPS.
Biggest drawbacks – As stated above, QBSE is a more basic version of Quickbooks and a lot of the functions you would normally see in Quickbooks is not in the self-employed version. For example, with Quickbooks, there is a wide range of different reports that you can run (with customizable options), but with QBSE, there are only a few including your basic expense report. Another drawback is there is no reconciliation function. You can still do this process manually, but other versions of Quickbooks make it easy.
Overall, QBSE is a great tool for independent contractors and self-employed individuals who want to become more organized with their business. By keeping track of expenses throughout the year, you can save money on your taxes. Some business owners don’t pay any attention to business expenses until tax time comes around, and by then, there may have been certain items that you forgot about that could have saved you money on your tax return.