QuickBooks for Self-Employed: Why You Should Switch
2017-10-12 | by Gene Reynolds
If you are an independent contractor, freelancer, or entrepreneur, you should seriously consider QuickBooks for Self-Employed (QBSE) to accurately track, record, and report your business activity.
QBSE is a cloud-based accounting system designed for individuals who have a “Schedule C” business for tax purposes. This includes anyone who conducts business as a sole proprietorship or single-member LLC. However, QBSE is not geared towards business that operate as a corporation or partnership.
For individuals who are concerned about accurate tax recording and reporting, QBSE assists your business with:
Determining how much to pay in quarterly tax payments.
Reminding you when to pay quarterly tax payments.
Importing business activity onto Schedule C to complete your year-end tax return.
QBSE also syncs with TurboTax to help make quarterly tax payments and complete your year-end tax return. When you sign up for QBSE, you have the option to add Turbox to set up your account for tax payments.
The software includes other important features to help self-employed individuals run their business more efficiently.
5 Key Features of QBSE
Quickbooks for Self-Employed helps individuals keep accurate records and stay organized. This is especially important for tax reporting to ensure that you do not have to track down receipts or manually enter transactions that are subject to human error.
Automatic mileage tracker. If you spend a significant amount of time in your car for business, the mileage tracker saves and categorizes your business trips, ensuring accurate tracking and reporting.
Bank feeds. This will automatically import transactions from your linked banked account to the QBSE software to track and organize expenses. You can also sort business from personal expenses to ensure that each transaction is accurately attributed to your business.
Receipt capture. QBSE helps you organize receipts and keep records by snapping a photo of the receipt from your mobile device. The software matches and categorizes expenses to the bank feed automatically, then stores the information for tax reporting.
Invoice management. If your business requires sending invoices to customers, clients, or vendors, you can create and send invoices from virtually anywhere. Using your mobile device, you can invoice customers and monitor open invoices to follow up with payors. If you enable online payments, you can receive payment faster.
Tax management. QBSE generates quarterly tax estimates so that you know what is due each quarter to avoid surprises. The software includes a reminder of when to pay taxes so that you avoid late fees.
These features will save you time and energy throughout the year and especially during tax season. You can also get started very quickly.
Can You Transfer Records to Quickbooks for Self-Employed?
Reynolds and Associates discovered that new QBSE users were previously using a spreadsheet or other software to keep track of their business activity. If you fall into that category, you are probably tired of having to manually input transactions and generate reports on your own.
QBSE can help you set up your business to organize income and expenses in real-time. It also has built-in features, such as the mileage tracker, to assist you in finding additional tax deductions.
Some businesses also fall into a special category of needing to track payments to 1099 contracted employees or other activity outside of the normal scope of operating as an individual. If that is your case, you may want to consider upgrading to a heftier QuickBooks option such as QBO Essentials or QBO Plus.
QBSE does not generate a balance sheet since it is not required for tax return purposes. Additionally, if you are looking to compare profit & loss from year to year, the best course of action is to generate a full-year report in QBSE and compare to your previous Schedule C tax return. After your first year using QBSE, you may compare the current year’s P&L report to prior years in QBSE.
How Reynolds and Associates Can Get You Started
Accounting firms such as Reynolds and Associates represent an integral part of QBSE, as the software allows users to easily send business information to their accountant. With QBSE, you can:
Invite your accountant to view your books if you have questions.
Invite your accountant to review your books to complete your tax return.
Avoid the hassle of sending supporting tax documents to your accountant, as QBSE hosts the information.
This process is convenient for you as a business operator and your accountant to ensure accuracy and a faster turnaround time filing your taxes.
As a certified QuickBooks ProAdvisor, Reynolds and Associates can help users get set up in QBSE, walk through how to use the mobile and online versions, and explain fundamental accounting terms and features in the software.