Although Intuit QuickBooks Online (QBO) is one of our top picks for small business accounting software, it’s not a perfect bookkeeping solution for self-employed professionals like Intuit QuickBooks Self-Employed (QBSE).
QuickBooks Online is overkill for what sole proprietors need and, frankly, it’s not worth the trouble it takes to overcome the learning curve. That’s why most self-employed individuals muddle through with spreadsheets, a folder full of receipts, and a gut feeling about what to set aside for taxes each quarter.
QuickBooks Self-Employed is a different story altogether. Intuit, Inc. tailored 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 suite.
Also read: Do I Need Accounting Software?
- Who is QuickBooks Self-Employed for?
- QuickBooks Self-Employed features
- QuickBooks Self-Employed pricing
- Is QuickBooks Self-Employed right for you?
Who is QuickBooks Self-Employed for?
As the name implies, QuickBooks Self-Employed is intended for self-employed individuals. Freelancers, independent contractors, and micro-business owners all fall under the self-employed umbrella. As such, all of them have very similar needs when it comes to accounting software, and QBSE was specifically designed to meet them.
Compared to QuickBooks Desktop or even QuickBooks Online, QBSE is a pared-down solution that focuses on the accounting tools that self-employed folks care about most: expenses, mileage tracking, and taxes. QBO—the small business-friendly alternative to QuickBooks Desktop—includes features for payroll, currency conversion, inventory tracking, bill payments, and advanced reporting. Small businesses can benefit from these features, but most solopreneurs don’t have a use for them. They just need something that’s easy to use and will get the job done.
QuickBooks Self-Employed features
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 quarterly taxes due from self-employed filers.
Invoicing and expenses
When you work for yourself, your top priority is ensuring that you’re balancing your budget every month. QBSE helps in this endeavor with tools for invoicing, collecting payments, and keeping track of expenses.
Invoicing can sometimes be a complex process with many opportunities for something to slip through the cracks. The QBSE app allows you to quickly create and send invoices while on the go, then transfer payments to your bank account so you can access your money ASAP. For ongoing projects, there’s a recurring invoices option as well.
You can also use the QBSE mobile app to snap a picture of your receipts, and when you connect your bank account, the platform will automatically import all of your transactions. Then, you can separate your business expenses from your personal ones and add notes to remind you what certain expenses were for. Over time this aggregate data creates a high-level overview of your spending habits. This information is tremendously useful for making smarter decisions with your expenses in the long run.
Among the many handy accounting features of QBSE, automatic mileage tracking might be the most unique. From a tax perspective, 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 business mileage, but they wind up giving their best guess at tax time and crossing their fingers. The QBSE mobile app has you covered.
The app uses your phone’s GPS capabilities to automatically track your 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 every year on April 14.
If not managed carefully, taxes can be a major burden for anyone who’s managing their business accounting on their own. On this front, QuickBooks Self-Employed calculates your estimated tax obligation based on your revenue, expenses, and tax filing status (single, married, filing jointly, etc.). You’ll know exactly what your tax savings should look like before they are due. QBSE also looks for all applicable Schedule C tax deductions, so you can rest assured that you’re not paying too much or too little.
With the mid-range QBSE Tax Bundle edition, you also have the option to pay your quarterly taxes directly from QuickBooks and transfer all of your information to TurboTax when tax season rolls around. With the QBSE Live Tax Bundle plan, you can consult a CPA in real time if you get stuck and have them give your tax return a final review to make sure all of your bases are covered.
The reporting features in QuickBooks Self-Employed are extremely easy to use. The home screen features a dashboard view for your income, expenses, invoices, and mileage. By navigating to the settings tab, you can also generate a year-to-date profit and loss 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.
QuickBooks Self-Employed pricing
QuickBooks Self-Employed is available in three editions:
|Plan||Price (excluding promotions)|
|Self-Employed Tax Bundle||$25/month|
|Self-Employed Live Tax Bundle||$35/month|
The most affordable edition includes all of the basic accounting features mentioned above: expense tracking, mileage tracking, bookkeeping, and quarterly tax preparation. If you need a little more help with your taxes, you might benefit from one of the pricier tax bundle editions that include integrations with TurboTax or TurboTax Live.
Is QuickBooks Self-Employed right for you?
Intuit Inc.’s portfolio of financial management products is robust with solutions for a wide range of needs. If you’re a small business owner who needs advanced accounting software features to run your business, QuickBooks Online might be the best fit for you.
However, QBO might be too expensive or too difficult to use if you’re a sole proprietor. QuickBooks Self-Employed offers the most impactful accounting features at an affordable price for self-employed individuals looking for a way to manage their bookkeeping needs and tax obligations on their own.
Read next: Top Small Business Accounting Software 2021
This article was originally published on July 18, 2016. It was updated by Kaiti Norton.