You just did it correctly, @kari14. I'm delighted to provide additional insights about categorizing credit card transactions and transfers in QuickBooks Self-Employed (QBSE).
You're correct that when QuickBooks downloads transactions from your bank, you can categorize money transfers as Transfers. These transfers aren't business expenses since you're not buying anything. Instead, you're categorizing your payment to your bank or credit card for business purchases you already made. Also, please use the credit card payment category for CC payments only.
Furthermore, if individual expenses appear after a purchase, that's the time you need to categorize those transactions as expenses. If you see records of the money moving to and from an account, categorize both as Transfers.
Importantly, QBSE 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. Refer to this article for more details: Categorize money transfers in QuickBooks Self-Employed.
Also, if you need further assistance on what accounts to use for your transactions, seek help from your accountant to ensure that your books are accurate.
On top of that, you'll want to check out this resource about how to get the quarterly and annual tax info in QBSE: Get quarterly and annual tax info from QuickBooks Self-Employed.
Feel free to reply below if you have other questions about categorizing transactions in QBSE. I'm just around to help. Have a great day ahead!
