Home Business - Entering Expenses

Anonymous · ‎January 03, 2023

Hi - I work as a psychologist and, as I do the majority of my work virtually, I work out of my home (no other office). Historically, we have written off 20% of home expenses that are also used for the running of my practice (e.g. utilities, some home repair, etc...) as that is the percentage of square footage of the home used for business purposes. This will be my first year using Quickbooks Online and wondering if there is an automated way of entering the expense (a receipt for something related to home repair, for example) and Quickbooks automatically calculating the 20% towards the business. The expense is sometimes being paid out of a personal account rather than a business account yet may also be paid for out of a business account. Can categories be created that automatically accomplish this task or do these expenses need to be entered as journal entries in the Chart of Accounts? Thanks!

Alex M · ‎January 03, 2023

Hi there sjfwhite,

It's vital that all your transactions are entered correctly so that your expense totals can be accurate. QuickBooks Online is a great tool able to help you keep track of expenses and sales so you can see the profitability of your company. I can point you in the right direction for assistance with entering transactions that affect personal and business.

In order to know how to mark the part of an expense paid with personal funds for business, as well as for those for personal reasons paid for with a business account, I recommend checking out the guides located in this article about Mixing personal and business funds.

If you have any other questions, feel free to reach out here.

Anonymous · ‎January 03, 2023

Hi Alex - was there a link you intended to include in your reply? Thanks!

Alex M · ‎January 03, 2023

Hello again sjfwhite,

Yes. The link for Mixing business and personal funds is located here.

Have a great day.

Anonymous · ‎January 03, 2023

Thanks Alex - not sure that answered my question. I run the business out of my home so a portion of home expenses are business expenses (in my case 20%). Is there a way of entering those into Quickbooks where Quickbooks automatically calculates the percentage that is business and reflects that towards my expenses? Thanks again.

Alex M · ‎January 03, 2023

Hello again sjfwhite,

Within QuickBooks Online, there isn't the option to memorize percentages to assign to expenses. They would need to be manually assigned to each category that you'd want to affect. I can see how this would be a feature that you'd like to see added to the software. I recommend leaving feedback in the system by clicking on the Gear icon, then Feedback. The comments made in that section are taken into consideration when designing new features for QuickBooks Online.

If you have any other questions, feel free to reach out here.

obhorst · ‎January 05, 2023

In your situation, I claim the entire amount of the expense as either personal or business then, depending on the need, I adjust the entry with a journal entry, either monthly, quarterly, or annually. If you enter as a personal expense originally, then do not take sales tax into consideration. Instead, calculate the sales tax on the journal entry. If you enter as a business expense originally, take the sales tax into consideration when wntering, then back out the appropriate tax on the journal entry.

BeckyJe · ‎January 06, 2024

Did you get an answer to this?

Trish_T · ‎January 08, 2024

Hi BeckyJe,

Thanks for joining us here. To ensure your expenses are being entered accurately, and in keeping with government guidelines, I suggest speaking with an accounting professional. They'll provide you with their expertise and best course of action, to ensure a positive outcome on your books. If you don't have an accountant, we can help you locate a ProAdvisor in your local area.

Feel free to reach back out, if you have any other questions. We would be glad to help!

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Home Business - Entering Expenses