We love Intuit's QuickBooks. We’ve reviewed QuickBooks several times over the years, and we use QuickBooks to help run a small business. So why did we tackle this QuickBooks Self-Employed review?
Because as much as we love QuickBooks, we would never, ever recommend it to a freelancer or to a consultant looking for a way to track income, expenses, and estimated taxes. It’s overkill for what sole proprietors need and, frankly, it's not worth the trouble it takes to overcome the learning curve.
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That’s why most self-employed individuals muddle through with an Excel spreadsheet, a folder full of receipts, and a gut feeling as to what to send Uncle Sam each quarter. But QuickBooks Self-Employed is a different story altogether. Intuit tailored QuickBooks Self-Employed (QBSE) to fit the exact needs of the self-employed: a way to keep track of money in and money out without the complexity of a full-fledged accounting-package.
This QuickBooks Self-Employed review explores the following features. Clicking on a link below will take you directly to that feature.
- Categorizing transactions
- Mobile features
- Mileage tracking
- Calculating estimated income tax
Intuit designed QBSE to be a mobile service, and the app lets you categorize and track expenses and income on the go.
QuickBooks Self-Employed Features
A Web-based service, QuickBooks Self-Employed addresses three essential challenges that micro-business owners face: tracking business income, separating personal expenses from business expenses (including car mileage), and calculating estimated income taxes due each quarter from self-employed filers. Ancillary features include reporting, online invoicing, and exporting income and expense data to Intuit’s TurboTax—if you so choose.
Instant—and even automatic—transaction categorization makes QBSE worth the price of admission. To get the most out of the service, you’ll want to link your bank and credit card accounts with your Intuit account. You can easily accomplish this when you set up QBSE. The site even guides you through importing previous transactions from a file that you can download from most online banking systems. That lets you include your financial history back to January 1 of the current tax year.
You can also log onto your QBSE account from any desktop or laptop Web browser. The dashboard-like home page shows your year-to-date business income and expenses.
Thereafter, any transactions that post—credit card purchases and bank deposits/withdrawals—will appear in your QuickBooks Self-Employed transaction log. You can then assign each entry to a category (personal, business, or split), and QBSE will ignore the personal ones and only calculate taxes, deductions, and P&L (profit and loss) on the business transactions. That means you don't have to maintain a separate credit card and checking account for your micro-business.
Even better, you can further categorize business expenses according to the IRS-approved deduction categories (found on the all-important Schedule C), such as Advertising, Assets, Commissions and Fees, Repairs and Maintenance and so on.
The mobile app automatically calculates mileage as you drive, and it packages each jaunt into a trip that you can designate as personal or flag as business mileage for a year-end deduction.
The QuickBooks Self-Employed service isn't just mobile-friendly, it's mobile first: Intuit’s developers assumed you’ll access the service from a smartphone or a tablet most of the time; performing primary tasks on a portable device is a cinch. For example, simply swipe left or right to categorize transactions shown in the log. Entries related to your business life: swipe right; entries related to your personal expenses: swipe left.
You can even create rules that tell QBSE how to treat certain transactions, which the system subsequently categorizes automatically. Such ease of interaction means you’re much less likely to fall behind on categorizing expenses and income than if you were using a system that required more proactive effort; you can handle the task in stolen moments as you wait for a client or stand on line at the grocery store.
QuickBooks Self-Employed keeps you up-to-date on the amount of estimated taxes you owe for the current quarter and when they're due.
Another welcome feature: mileage tracking. The IRS lets you deduct miles driven for business purposes—but you had better be prepared to back up your claim in the event of an audit. Most business owners start the year with the best intentions of accurately tracking mileage, but they wind up simply guesstimating at tax time and hoping for the best. The QBSE mobile app has you covered.
It automatically starts tracking mileage when you start driving, and it creates a discrete trip when you stop. The app then prompts you to designate that trip as personal or business and, if business, to identify its purpose. No more need to reconstruct your travels in a panic each April 14.
On the tax front, QuickBooks Self-Employed calculates estimated income taxes on your behalf, based on the income, the expenses it captures, and your tax situation (single, married filing jointly, etc.) you indicate at setup. At any point you can click on the Taxes link to see the running total—this helps you plan to save enough for that payment on the due date shown. There’s even a "Pay Now" link that lets you fill out a 1040-ES form to mail with your payment, or you can opt to pay online (a feature available with an upgraded QBSE subscription).
QuickBooks Self-Employed lets you access several key reports through both the mobile app and online service.
We like QBSE's handy reporting feature. The home page features a dashboard view into your business so you can see where your money goes. Bar charts display your income and expenses to date; a pie chart shows expenses broken down by category. You can also generate a year-to-date P&L statement, a tax summary, and tax details. When you access QBSE on a computer Web browser (not the mobile app), you can even generate basic invoices and email them to clients.
Best of all, QBSE does not feel like the typical inscrutable accounting program, and you can start using it instantly with no training. A QBSE subscription costs $10 per month, or you can bundle in TurboTax (including one federal and one state filing, and online quarterly estimated tax payments) for $17 per month. If you are a freelancer, consultant, independent contractor, or other sole proprietor, QuickBooks Self-Employed may be just the tool you need.
[Don't miss this article: 11 Small Business Budgeting Tips].
Jamie Bsales is an award-winning technology writer and editor with more than 20 years of experience covering the latest hardware, software, and Internet products and services.
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