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sootsmeohio
Level 1

Can I assign a category for personal, non-business expenses that show up on my bank account transaction list?

For example, if I buy groceries with my bank credit card, it will show up on the downloaded transactions.  How do I account for this personal expense?  QuickBooks Self Employed allows me to tap a Personal Expense icon, and the selected transaction was separated from my business related expenses.  Is there a similar feature in QuickBooks?

Solved
Best answer October 15, 2018

Best Answers
Rustler
Level 15

Can I assign a category for personal, non-business expenses that show up on my bank account transaction list?

QBSE is single entry bookkeeping, QBO or QBDT (desktop) is double entry accounting.

In accounting, you do not mix personal finance with business finances.

If you are taxed as a sole proprietor or a partnership, then if you must enter personal purchases, you use owner equity drawing as the expense for that purchase.  You need to stop doing that though, you can dedicate a personal credit card to the business if for some reason you do not want to get a business credit card.


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7 Comments
Rustler
Level 15

Can I assign a category for personal, non-business expenses that show up on my bank account transaction list?

QBSE is single entry bookkeeping, QBO or QBDT (desktop) is double entry accounting.

In accounting, you do not mix personal finance with business finances.

If you are taxed as a sole proprietor or a partnership, then if you must enter personal purchases, you use owner equity drawing as the expense for that purchase.  You need to stop doing that though, you can dedicate a personal credit card to the business if for some reason you do not want to get a business credit card.


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Jamie Ry
Level 1

Can I assign a category for personal, non-business expenses that show up on my bank account transaction list?

So, for instance, if I have a checking account for business but a couple of times was used to pay a personal insurance, I log it as owner draw or contribution expense? Also if I had a large deposit that was not business income, how would I log it? I don't want the books not to come out balanced. Thank you

HernandezBooks
Level 1

Can I assign a category for personal, non-business expenses that show up on my bank account transaction list?

hi. my method is to create an owner draw account under the equity side of the charts of accounts. this very account is what i then use for all my personal withdraws. the same account is the one i use to mark any purchases made as personal. so technically is all recorded as an owner draw. rather than creating multiple accounts as personal and business and then having a long profit and loss report to sort through. keep in mind that owner draw account also known in quickbooks as Owner's Equity account is not considered in the profit and loss reports. these amounts are only displayed and accounted for under balance sheet. same place where other equities go like loans and credit cards. etc.

cbreen
Level 1

Can I assign a category for personal, non-business expenses that show up on my bank account transaction list?

Can you put those owners draw transactions in categories?

RenjolynC
QuickBooks Team

Can I assign a category for personal, non-business expenses that show up on my bank account transaction list?

Thanks for joining in on this thread, cbreen.

 

I'd like to share some details on both platforms. If you're using the QuickBooks Self-Employed version, you can select Transfer from the Type drop-down list. Then, search for Personal withdrawal (also called owner's draw) from the Category menu. This is the money you pay yourself from your Self-Employed business funds.

 

Here's an article and screenshot for reference: Transfers: Owner's Withdrawal

 

 

To view the Schedule C categories, you can open this article: Schedule C and expense categories in QuickBooks Self-Employed.

 

In QuickBooks Online, if you don't have the owner's draw account, you can add it by following the steps here: Set up and pay an owner's draw.

 

For more information about mixing funds to your business, feel free to read this guide: Mixing business and personal funds.

 

I'll be right here if you need more help with your QuickBooks Self-Employed account. Just add a reply below, and I'll get back to you as soon as possible. Have a good day ahead!

OOC
Level 1

Can I assign a category for personal, non-business expenses that show up on my bank account transaction list?

In addition to this instruction, can you tell me how to handle the following:  

 

When I started using QB (last year) for our new business (became an S Corp in 2021 and for 20 years prior to that we were Sole Prop), we had been using a bank account for both personal and business expenses in a different accounting program all together.  When I set up QB, I linked the bank account and it brought in all of the personal expenses as well as any business expenses we had incurred.  After a few months I realized the problem with this and we had also established a separate business checking account so I made the personal checking account inactive.  Now I am trying to run a P&L and realize there are many expenses in there that shouldn't be. I can't delete them because the bank account is inactive.  Should I just create a "Other Expenses" register in the Chart of Accounts to direct those personal expenses so they do not appear on our business reports??  The expenses that I am talking about are personal and were paid via other funds (NOT OWNER'S DRAW).  So I do not want them to be listed in a Owner's Draw account.  Does this make sense?  Thanks for your help.

Angelyn_T
QuickBooks Team

Can I assign a category for personal, non-business expenses that show up on my bank account transaction list?

Hi, @OOC.

 

Thank you for sharing the details of your concern. I'm here to guide you with the steps on how to handle your expenses accordingly.

 

Yes, you may create an expense account to direct your personal expenses. However, I recommend consulting with a professional accountant before performing the process. The accountant can guide you with proper options that keep your books in place.

 

On the other hand, you can also temporarily re-activate your account to delete or remove those transactions from your record. Here's how:

 

  1. Click on Accounting at the left pane, then click on Chart of Accounts.
  2. From the Chart of Accounts, go to the small gear icon, then mark the box beside Include inactive.
  3. Look for the account, then hit on Make active under Action.

 

From there, you can now delete each entry successfully.

 

Once done, you can delete the account again.

 

On the other hand, here's an article you can read more about running and customizing reports in QuickBooks Online: Run reports in QuickBooks Online.

 

If you have any other questions about your reports and transactions, please notify me by adding a comment below. I'm more than happy to help. Have a good one!

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