Money at 30: Quickbooks Self-Employed Review
A couple of years ago when my dad did my taxes, it was kind of a mess. Sure scanning my 1099s, W-2s, and other forms to send to him in Arizona was simple enough, but when it came time to talk deductions I was ill prepared. While I did make efforts to find old e-mails or dig up receipts from throughout the year, it was clear I could be a lot better organized with the whole thing and potentially save more as a result.
Shortly after getting through that, I decided to sign-up for Quickbooks Self-Employed (or QBSE, for the sake of this article) to see if that could help make tax time a bit easier the next go round. Now, two years later and having just completed my latest return, I can tell you that it certainly did make a difference. With that, here’s a quick look at Quickbooks Self-Employed and how it has helped me to save money the past few years.
What is Quickbooks Self-Employed?
Even if you don’t recognize the name offhand, there’s a good chance you’ve at least heard of an Intuit product. The company is behind the TurboTax software you’ve likely seen on Costco displays each spring as well as their Quickbooks
suite meant to aid small businesses with accounting. In that same vein, Quickbooks Self-Employed is a pared down version of Quickbooks Online (from what I’ve been told) specifically aimed at sole proprietors like myself.
Getting Started With Quickbooks
To me, the most useful element of QBSE is the ability to keep track of all your transactions. This is accomplished by first linking your bank accounts and credit cards to Quickbooks. Doing so will then allow you to go through all of your transactions — incoming and outgoing — and label them as “personal” or “business.” Furthermore, if it is business, you can select more specific categories that will come in handy when figuring out your tax deductions. You can also split transaction amounts between personal and/or as many business categories as you want and in whatever manner you choose.
You can either use the website or the app to go through your transactions. In fact, doing so on mobile provided an almost Tinder-like experience as you can swipe right to mark a purchase as “personal” and left for “business.” In either medium you can also set up rules so that future (and even existing) transactions of that nature will automatically be categorized for you.
Another helpful element is the ability to attach digital copies of receipts to any transaction. This is achieved by simply taking a picture of said receipt or perhaps screenshotting a confirmation e-mail. Honestly this was a feature that I didn’t use much in the past year but it’s one I probably should start taking advantage moving forward.
You can see for yourself how easy Quickbooks is to use in my video review below:
While I don’t have a job that requires a lot of driving (my typical commute is the 20 feet from my bed to the next room where my home office is), Quickbooks Self-Employed opened my eyes to how lucrative tracking your business mileage can be. In case you don’t know, the current rate is $0.545 per mile driven for business. That means that my road trip to Tulsa to cover an event for another website earned me more than $200 in deductions.
If you do drive a lot, the QBSE app also offers an auto-tracking option. Although I haven’t tried this feature to a great extent I have experimented with it a few times and it does seem pretty helpful — and it definitely comes in handy for people like me who forget to check their odometer until it’s too late 😉 Of course you can always add your miles manually along with a description of what the travel was for, including start and end points.
Another useful feature for freelancing is Quickbooks’ invoicing section. Not only does QBSE offer the ability to generate and track invoices but you can also sign up to make those invoices payable online. If you do sign up for that option, bank transfer transactions are free, although credit card payments will cost you 2.9% plus $.25. That might not exactly be ideal but it’s also not terrible.
Tax Estimates and More
Now onto the reason I bought the software in the first place. In addition to the extremely useful transaction classifications and mileage tracking that come into play around tax time, Quickbooks Self-Employed also helps you estimate your quarterly taxes. To do that, you’ll want to set up your tax profile, keep up to date on categorizing your transactions, and be sure to include your business income. For those of you who are unsure if you need to be paying quarterly taxes, Jonathon Dyer actually has an insightful article on that very topic that I recommend.
This is also where my one complaint about QBSE comes in. Although you can generate some helpful tax reports including a spreadsheet of your different expenses and deductions, I was unable to find a way to export that data in a format that my father could plug into TurboTax. Doing some poking around, I found that this problem may be solved for those who actually purchase the Quickbooks/TurboTax bundle. Additionally, there is a way to invite your accountant to access your books but, at this time, I’m unsure if that means that they’d be able to export the TurboTax file or not.
Regardless of that little hiccup, this is where the software really paid for itself. Instead of fumbling for receipts or trying to brainstorm other items I was entitled to write off, I was able to easily provide all of my deduction data, which added up to be quite a substantial amount. Better yet, my dad even told me how impressed he was with my organization — even at 31, that still feels nice.
This past year, I actually managed to do my own taxes (thanks to Credit Karma Tax) and it also seemed to go well. The reports that I was able to export from Quickbooks allowed me to easily plug in my deduction numbers, although I will say that some didn’t seem to properly line up, so I had to pay extra attention. Still, it did make things much easier than they would have been otherwise.
Quickbooks Self-Employed Cost
Quickbooks Self-Employed can be accessed through their website and/or their helpful mobile app. A monthly subscription for the service retails for $10 a month, but they do sometimes offer sales, for example at the time of this publication they are offering the first 3 months for 50% off. Additionally, they offer a bundle with TurboTax support that goes for $17 a month. Incidentally you can actually write off your subscription as a business expense, which feels awesomely meta to be honest.
Final Review on Quickbooks Self-Employed
Having now gone through the whole tax process solo, I can honestly say I wouldn’t have been nearly as successful had I not invested in Quickbooks Self-Employed — it’s not a commercial, it’s just true. While I can’t say for sure how much I saved as a direct result of the software, I can tell you anecdotally that there were plenty of business transactions I came across I wouldn’t have given a second thought to had the software not brought them to my attention. Additionally, I’ve now learned just how helpful it is to have all of your business expense data in one place along with invoice tracking. In that aspect, while I mostly use it to help with my taxes, this could also be an important tool for freelancers looking to keep better track of their finances.