Being self-employed makes it difficult to manage your finances and keep track of your taxes. After all, when it comes to crucial administration, you’re probably alone. The good news is that QuickBooks Self-Employed, an online accounting programme, makes bookkeeping less painful.
You can manage your accounts while on the road using QuickBooks Self-Employed, which is affordable, easy to use, and accessible in desktop and mobile versions. Within a single, user-friendly interface, you can make invoices, track payments, reconcile bank accounts, and produce comprehensive profit and loss reports.
Although utilizing this user-friendly program is rather simple, if you want accurate records at the end of the year, you need to be sure you’re using the system correctly.
QuickBooks Transaction Management
Due to the cash-based nature of QuickBooks Self-Employed, you must manually record each expense and payment you receive. Although it might seem like a lot of labour, it really isn’t. Each transaction may be added in a matter of seconds, and you can even scan or upload invoices and receipts to accompany each record.
Click the “Transactions” link on the left-hand side of the page, then click the “Add transaction” link in the upper right to add a new transaction. Choose the transaction type, which is typically either a business expense or a business revenue. A description, a sum, and a transaction category can then be entered. If you want to record a payment you’ve received, select “Business Income” or pick from the list of available spending categories.
The home page will update with your income total as soon as you save the entry. Your profit and loss report ought to have been updated as well.
Keeping track of mileage
Business mileage is a significant, tax-deductible expense that is frequently not recorded properly. However, you risk paying more tax than necessary if you don’t claim reasonable transportation costs that are essential to your firm. Fortunately, the procedure is simple using QuickBooks Self-Employed.
You have the choice to manually enter your business trips using the desktop program as well as the mobile app. You must, however, include your start and end addresses. According to your tax situation, QuickBooks will determine your deductible mileage costs after calculating the number of miles you’ve travelled.
You can also elect to use the automated mileage monitoring feature. A smartphone app is necessary for the auto-tracking feature. Simply swipe to start your car when you want to travel. Your starting point, end point, and distance travelled will all be computed and applied to your account.
Using QuickBooks for tax preparation
You can construct your own tax profile in QuickBooks, which will include all the data needed to determine your yearly tax obligation. For instance, in the UK, you are required to indicate whether you are married or single as well as your personal tax-free allowance. The tax summary screen includes your tax liabilities at the bottom of the page and displays any pertinent income and spending. You shouldn’t require anything else to finish an online tax return.
Reporting: Profit and Loss, Tax Summary, and More
Both your tax summary and a list of your most recent tax information are provided on the report page. Your tax information must be accurate and current in order to avoid having your tax responsibilities calculated improperly.
You can also locate your “Profit and Loss” report here, which includes a thorough explanation of your earnings, costs, assets, liabilities, and profit. The report can be viewed for the current tax year, the tax year before that, by month, or for the most recent quarter. The top of the page displays your turnover and any other income, and the bottom section lists your expenses by category. In theory, the “Net Income” number represents your taxable profit.
How to Manage Invoices in QuickBooks
QuickBooks Self-invoice Employed area is excellent for keeping track of who has paid you and which debts are still unpaid. It’s crucial to keep in mind that settled invoices do not automatically transfer to your tax summary and profit and loss report. Even after you designate an invoice as “Paid,” you’ll need to make a new transaction to record the payment.
Simply click “Create invoice” at the top of the screen to start a new invoice. A box with the label “Client name” can be found at the top of the invoice page. If this is the first time you’ve sent this client an invoice, you can provide their full name, mailing address, phone number, and email address. If you are sending an invoice to an existing customer, their information ought to automatically complete in the box.
In the description box, click the “Add work” link, and then fill out the job’s specifics. Either a flat rate or an hourly rate can be established. Click “Add to invoice” after entering a monetary value. If everything is accurate, enter your preferred payment information in the box provided, and then click the “Send invoice” link in the bottom right corner of the page. The invoice can also be saved as a draught.
Go to the main invoices page and select “Mark as paid” after receiving payment. The status link should turn green instead of grey.
Self-employment leaves little time for administration and accounting. However, employing a complete accounting software package like QuickBooks will help you significantly simplify your life.
Receipt organization:
You can arrange your receipts so that they are ready for tax season. Automatic expense categorization and easy transaction information entry are both provided. Additionally, you can take a picture of your receipt and email it straight from your mail.
Estimate taxes:
You can prevent late fees by using the automatic reminders of quarterly tax due dates. You may quickly and simply organise your income and expenses for tax filing.
Pay taxes:
Connect to TurboTax Self-Employed and instantly transmit your financial data entering. Sort transactions into appropriate Schedule C categories, enter your expenses there, and transfer Schedule C income and expenses with ease.
Plans and Pricing Of QuickBooks Self-Employed
There are basically three types of plans are available:
1. QuickBooks Self-Employed
2. QuickBooks Self-Employed Tax Bundle
3. QuickBooks Self-Employed LiveTax Bundle
The benefits and drawbacks of QuickBooks Self-Employed
The market offers a wide variety of software. Consequently, it might be challenging to select the ideal solution that meets your demands and objectives. You may make your final decision with the help of the advantages and cons of QuickBooks Self-Employed stated below.
Pros:
1. User-friendly
2. It facilitates mileage tracking.
3. It is possible to invoice numerous clients and customers.
4. Create a mobile app that allows you to track miles, create invoices in QuickBooks Self Employed, and manage your revenue and expenses while you’re on the move.
5. Organize your finances for Schedule C.
6. You can use it to calculate your quarterly taxes and pay them online whenever you choose. And you can avoid penalties by paying them.
7. several possibilities for pricing in accordance with the plan
8. Multiple reports could be printed off for your bookkeeper, accountant, or even for your own records.
Cons:
1. Invoices without your name, address, logo, etc. cannot be accepted.
2. You are not given assistance with federal, state, or local taxes. Therefore, you must determine whether your state, nation, or city has any criteria for any of these on your own.
3. Even if you’re merely switching to new options, it can be challenging to switch to accounting software if it doesn’t function.
4. It must be used as a separate tool for time-tracking because there is no option for it.
QuickBooks Self-Employed is for you if you are a freelancer or solopreneur without any employees or contractors. When you’re ready, you can upgrade from the ordinary edition to the TurboTax bundle. It can help you automate and organize business activities and includes useful features for managing spending, filing taxes, and tracking mileage. Reach out to us at +1 844–736–3955 for further details.
