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Categorize money transfers in QuickBooks Self-Employed

Learn how to categorize transfers in and out of your bank and credit card accounts.

When you connect your bank and credit card accounts to online banking, QuickBooks Self-Employed automatically downloads your latest transactions. All you have to do is categorize them.

Money transfers between your connected accounts also show up in QuickBooks. Usually, this is when you move money between your business or personal accounts. Categorize transfers as Transfers in QuickBooks Self-Employed to keep your accounting clean and accurate.

Learn more about transfer categories

There are three categories for transfers: owner's deposit, owner's withdrawal, and credit card payment.

Use the owner's deposit category when transfers add personal money to your self-employment finances.

This is different from business income - it's not money paid to you by someone you work for. It's also not personal income. From an accounting perspective, you're investing in your self-employed business.

Use the owner's withdrawal category when transfers take money out of your self-employed finances for personal use.

Basically, this is when you move self-employment income to your personal accounts to pay yourself.

Use this category for credit card payments only. This category is slightly confusing. These transfers aren't business expenses since you're not actually buying anything. Instead, you're categorizing the payment you made to your bank or credit card for business purchases you already made.

When individual expenses show up after a purchase, you'll categorize those transactions as expenses.

Categorize a money transfer

After QuickBooks downloads transactions from your bank, you can categorize money transfers as Transfers.

Tip: If you see records of the money moving to and from an account, categorize both as Transfers.

QuickBooks Self-Employed doesn't calculate transfers as part of your estimated federal quarterly tax payments. It also doesn't include them as business income or expenses on your financial reports.

Transfers from income accounts

Let's say you have both a PayPal and a checking account connected to QuickBooks Self-Employed. If a client pays you $500 through PayPal, you'll see that transaction come in from your PayPall acount. That's income.

Then, you move that $500 to your checking account. You'll see the $500 again. This is a transfer, not income.

Categorize the PayPal transaction as Business and Income. Categorize the transfer to your checking account as a Transfer. That's because you received the income in PayPal and simply moved that same money.

Transfers from Etsy

When you receive income from Etsy, categorize the Etsy transaction as Business and Income.  When you deposit the money into your bank account, categorize it as a Transfer.

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