QUICKBOOKS SELF-EMPLOYED TAXES
QuickBooks Help Intuit
posted
09-07-2019 11:03 PM
last updated January 10, 2020, 10:35 AM
Manage taxes and forms with QuickBooks Self-Employed FAQ
Find out how QuickBooks Self-Employed can help you manage your taxes and forms.
We've rounded up the most commonly asked questions regarding taxes and forms in QuickBooks Self-Employed. Here are some of them.
Can I file my taxes with QuickBooks Self-Employed?
While QuickBooks Self-Employed helps you submit your Quarterly Tax Payments, it doesn’t handle filing your annual tax return. Our tax bundle includes TurboTax Self-Employed which you can use to prepare and file your annual tax return.
How does QuickBooks Self-Employed help me with my Quarterly Taxes?
QuickBooks Self-Employed estimates your Quarterly Estimated Taxes through the information from your Tax Profile, track income, expenses, deductions, and the projections for the remainder of the year.
How do I use my QuickBooks data for tax time?
Review and ensure that all your information is ready to file with QuickBooks Self-Employed Tax Checklist.
How do I run my year-end reports?
To ensure you don’t miss an important deduction, income or other expenses, run financial reports after finishing your Tax Checklist. The most important reports for your tax file are the Tax Summary, Tax Details, Receipts, and Mileage Log.
Self-Employment Taxes
If you're self-employed, you have to estimate your income, expenses, and deductions and pay taxes on the estimates on a quarterly basis. These are “estimated” or "quarterly" taxes and you’re required to pay them four times a year. QuickBooks Self-Employed calculates these for you.
December-January to-do's
The Tax Checklist helps you prepare all of your self-employed income, expenses, and deductions for tax filling. It'll be ready for you in mid-January, but until then, here's what you can do to prep your taxes.
Complete the Tax Checklist
Review transactions and connect your bank accounts. Connect your bank to download expenses, then give uncategorized transactions a category, if needed. If you have any unreviewed transactions from the year, mark them as business or personal.
Double-check your tax profile before you file. This is to ensure that your estimated taxes are accurate. You should review it every year or if you go through a life event like getting married or having a child.
Review your mileage. It can be one of the biggest tax write-offs. If you tracked any miles outside of QuickBooks, be sure to add them now.
To claim mileage, the IRS requires certain info about your vehicle. Your vehicle info needs to be up-to-date to claim vehicle expenses. Check and update your QuickBooks vehicle profile as needed in your account settings.
Double-check your recorded business assets. Assets aren’t like standard expenses. They usually last a long time (more than a year), tend to be larger purchases ($200+), and are used exclusively for your business. Examples of business assets are manufacturing equipment, cash registers, computers, and tools. Ensure that you categorized your business assets as business assets in QuickBooks.
Import or add missing transactions. Even if you accounted for every expense and source of income throughout the year, check if there are missing transactions. Then, add them to QuickBooks Self-Employed. If you paid cash for any business expenses or assets, add them manually.
January-April to-do's
Create a file of all your tax documents
Collect physical tax documents, receipts, registration info, and other forms you need for tax filing.
Prepare your return as early as possible. Do as much as you can, when you can. If you file with TurboTax, you can start to file your return as you wait for your forms to arrive.
If you expect a 1099 form from a client or employer, the business has until January 31st to e-file the form. Check with your employer to ensure your contact info is up-to-date with your mailing address and email address.
Run year-end reports
Run financial reports after you categorized and reviewed your 2019 data. The most important reports of your tax file are the Tax Summary, Tax Details, Mileage, and Receipts reports.
Keep reports handy to use while you prepare your return. File them away with your tax documents in case you need them in the future. Since many tax documents are now digital, you can keep a digital file along with printed copies.
If you have an accountant who files your return, you can email them your reports:
Learn how to email a report using a web browser.
On the mobile app, select the report and enter your accountant’s email address.
If your accountant uses QuickBooks Online Accountant, you can invite them to your QuickBooks Self-Employed account via Settings ⚙ .
Special notes for our Tax Bundle customers
Input all of your info into QuickBooks Self-Employed. Complete all transaction categories before you send your info to TurboTax.
We can only send the info to TurboTax once. If you have any new or missed information to add after you send your data you can still manually enter the info in both TurboTax and QuickBooks.
Be sure to use the same credentials between TurboTax and QuickBooks Self-Employed to waive filing fees and for your info to go to the right account.
QuickBooks doesn’t export certain deductions to TurboTax. TurboTax or your tax preparer (or accountant) can help determine which deductions are most advantageous for you.
QuickBooks tallies up the totals of your healthcare, assets, and actual vehicle expenses throughout the year. Use the Tax Summary or Tax Details reports to get these totals. TurboTax or your tax pro can use these totals as references.
What do we calculate?
We calculate the estimated taxes for self-employed users with service-based businesses. We calculate your federal quarterly payments for you.
We don’t calculate other types of tax estimates or more complicated tax scenarios, such as state income tax, sales tax, AMT, one-time lump-sum distributions, or tax credits. If you need to calculate these types of taxes, it's best to consult with an accountant.
What will your estimated payments be?
In the app, we’ll let you know about upcoming due dates and payments. For the details, select Taxes in the navigation bar and choose Quarterly taxes.
You can also look at the year as a whole and see what your biggest deductions are. Select Taxes in the navigation bar and choose Annual taxes. There you'll see your taxable business profit and details about your business expenses and how they translate into deductions (toggle between Spending amount and Deduction amount).
How do we calculate your taxes?
Our calculations are based on three main things:
Your self-employment income and deductions — the money you make and the deductions you're allowed for your self-employed work
Projections of your self-employed income and deductions for the current calendar year
Your tax bracket and the other tax profile info you added during setup
Estimated taxes explained
What the heck are estimated taxes? Here’s a rundown. The IRS has two basic ways of taxing a person's income:
Withholding. If you work for a company as an employee, your employer takes taxes out of each paycheck, known as "withholding." The withholding goes toward income, Social Security, and Medicare taxes.
Estimated taxes. If you're self-employed, you work for yourself, and you have to do your own withholding. You have to estimate your income, expenses, and deductions and pay taxes on the estimates on a quarterly basis.
Sometimes called “quarterly” taxes, you’re required to make payments on these estimates 4 times a year. These payments go towards your self-employment tax, which is a tax that covers your share of Social Security and Medicare taxes on the self-employed money you earned. Because you’re your own employer, you get to be the one to set aside money to cover the tax and send it to the IRS throughout the year.
Good news: You don’t have to figure out the correct estimate amounts all by yourself. QuickBooks Self-Employed calculates these for you and helps you pay them. We calculate the estimated taxes for self-employed people with service-based businesses. We calculate your federal quarterly payments for you.
Types of taxes we don't calculate
We don’t calculate other types of tax estimates or more complicated tax scenarios. These include:
State income taxes
Sales tax
AGI phase-outs and alternative minimum tax (AMT)
Children's interest
Medical expenses, stock payouts, and 401(K) draws
One-time lump-sum distributions
Special-cases standard deductions (if you're blind, over 65, etc.)
Tax credits
If you need to calculate these types of taxes, it's best to consult with an accountant.
How to find what your estimated payments will be.
We have signposts throughout the app about upcoming due dates and payments. For the details, click Taxes in the navigation bar and select Quarterly taxes. There you'll see the quarterly schedule, recommended payments, and amounts you've paid.
Click any quarter to reveal details about your income, deductions, quarterly profit, payments, and more. On the right, you can also view your projected profits for the rest of the year and your tax profile, both of which are part of estimated tax calculations.
You can also look at the year as a whole and see what your biggest deductions are. Click Taxes in the navigation bar and click Annual taxes. There you'll see your taxable business profit and details about your business expenses and how they translate into deductions. You can also download a tax summary (PDF) or tax details (XLS) for the year. (These files come in very handy when filing your annual taxes or working with an accountant.)
How we calculate estimated tax payments
We base our calculations on three main things:
Self-employment income and deductions
The money you make minus the deductions you're allowed for your self-employed work.
Projections for the current year
To estimate quarterly tax payments, you need a projection—an educated guess—of yearly self-employed profit.
We look at your average current income and deductions to figure the profit. Then, we project it forward for the rest of the year. The estimates are not for the income you have made, but a prediction of the profit you will make for the rest of the year.
As the actual data comes in (the transactions you encode and review), we will use more of the actual data instead of our projections. At any time, you can check the actual data and make adjustments to our projections from the Quarterly Estimated Taxes page.
Tax bracket and tax profile
The government sets tax brackets based on income levels. During setup, we ask some general questions about your tax situation to figure out what tax bracket you are in. We adjust for household income that is already been taxed (for example, if you or your spouse is also a W-2 employee for another company), and give you your standard deduction/s. You can check your tax profile info from the Quarterly Estimated Taxes page.
Do the estimated payments seem high?
Projections of profit for an entire year makes estimates seem high. A tax estimate is not for the money you have already made, but for the money, you will likely make for the rest of the year.
It can also be higher than expected because self-employed people have to pay both halves of the Social Security and Medicare tax. In contrast, a W-2 employee only pays one half, and the employer pays the other half.
Of course, if you do not review your transactions regularly and log business miles for your car, you may be missing out on deductions. This makes your profit, projections, and estimates higher.
Our goal is to have you owe no tax for your self-employment work at the end of the year. By paying the amounts we recommend throughout the year, you will not have a lot of money that you still owe for self-employment.
PDF of Checklist