Recording meals and expenses, vehicle expenses and work from home expenses.

MaryPorter · ‎February 09, 2021

When recording meals and entertainment, vehicle expenses, and work from home expenses do you record at 100% and then adjust after completing taxes? What is common practice?

Rochelley · ‎February 16, 2021

Hello @MaryPorter ,

Personally, I find it easier to enter the full expense and then make a general journal entry at tax time to back out the 50% for meals and entertainment. Work from home expenses are different because it is not common practice to record all of your home expenses, i.e. mortgage interest, utilities, property taxes, etc. in your business books. I use a spreadsheet to calculate my business use of home expenses, and then make a JE to QB for that amount. If it is important to you to see your P & L on a monthly basis, you can retroactively add 12 different JE's for the same amount.

While preparing my tax return, I make sure that the bottom line in my QB financial P & L matches the Statement of Business Income form in the tax return. If you want to PM me, I can send you the spreadsheet I use for this. Good luck!

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Rebecca R · ‎February 09, 2021

Hi there Mary,

Accurately recording your business expenses is an important part of the bookkeeping process. You need to know how to record these transactions, what account to record them against, and what amount you should record. I want to point you in the right direction to get the best support possible on this.

Our team of QuickBooks support experts are here to guide you when it comes to the technical side of using our accounting software. When it comes to knowing what percentage of an expense to record, based on how much you can claim on your taxes, your accountant will be a fantastic resource. They'll let you know if you should be recording just the amount that you'll pay once you receive your refund, or if you should record the entire amount of the expense and enter the refund separately.

If you're not already working with an accountant and want to connect with one, you're in luck! We have a database of QuickBooks-certified accountants that are ready and willing to guide you on the best bookkeeping practices for your business. You can navigate through the list of accounts in your area and across the country here: Find an Accountant. There are lots of accountants that regularly contribute here in the Community as well, so hopefully one will chime in with some advice to give.

Let me know when you have a question related to using our QuickBooks software. That's where I shine! Have a great day.

Rochelley · ‎February 16, 2021

Hello @MaryPorter ,

Personally, I find it easier to enter the full expense and then make a general journal entry at tax time to back out the 50% for meals and entertainment. Work from home expenses are different because it is not common practice to record all of your home expenses, i.e. mortgage interest, utilities, property taxes, etc. in your business books. I use a spreadsheet to calculate my business use of home expenses, and then make a JE to QB for that amount. If it is important to you to see your P & L on a monthly basis, you can retroactively add 12 different JE's for the same amount.

While preparing my tax return, I make sure that the bottom line in my QB financial P & L matches the Statement of Business Income form in the tax return. If you want to PM me, I can send you the spreadsheet I use for this. Good luck!

MaryPorter · ‎February 17, 2021

Thank you! this is the answer I was looking for :)

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Recording meals and expenses, vehicle expenses and work from home expenses.