I use Square API and Paypal to process orders directly through our website. Square and Paypal take the sale amount and deducts the processing fees then sends me the remainder as a deposit to my bank. In Quickbooks self-employed, I recorded all of those deposits as "Income".
Now in trying to do my taxes (using TurboTax online), QBSE is pulling in the "Income" category, and also asking me to put in any 10099-K's I got which is effectively doubling my income on the return.
Should I recategorize all the deposits to my bank as something else, and then just list my 1099-K's from Square and Paypal as income?
Should I delete the "Income" QBSE imported into Turbotax and create income line items for my 1099-K's?
Could really use some help here????
When you make a sale, where does QBs show the money going. Directly into your Bank account, Undeposited Funds or where?
And are the Square & PP Fees being taken out of each transaction or a monthly Fee? If they are taken out of each transaction, then you need to make sure it's split out of each deposit.
Now for the double income.... It sounds like QBs is putting the money into the system, possibly Undeposited Funds, but it's not shown as deposited in your Bank account. Then when a deposit is made, QBs sees it as new money and it is not connected to the money you collected from the sale. So double income.
Go back to one of your sales and track what accounts it is being entered into in QBs. Then find why it's not getting to the Bank account BEFORE the deposit. So when the deposit hits, it matches.
Bank Feed is not really meant to enter items into your bank account. It is meant to help you quickly match the entries you've made in your bank account with what the bank is showing they have received or paid out.
Thanks for the reply. I am using Quickbooks Self-Employed, and not QB's by the way. It's different enough to make talking about it with QB users tough.
It tracks my bank account and lets me assign deposits and withdrawals. All of my money that gets deposited by my two payment processors (Square and Paypal) get automatically categorized as "Income" due to setting up a rule (filter) which automatically categorizes them as such when they hit my bank. Now I could remove that filter, and recategorize the deposits as anything I like.
Should i be categorizing them as "Deposits" and then manually do my "Income" based on amount of sales minus fees? With of course the fees being a "fee" in QBSE, so it shows up as a tax-deductible cost of doing business?
As i have it setup right now, I have no fees, because only the amount of my sale minus the transaction fees is entered into QBSE when the deposit is made by my payment processor.
Or should i leave the deposits as "income" so its easily tracked, but then manually put in my daily/weekly/monthly processing fees?