Quickbooks Online Essentials: How to record an out-of-pocket healthcare expense?

That is a personal itemized deduction at tax time, it is not a business expense

https://www.irs.gov/taxtopics/tc502

that link will help, and especially the link at the end of the article

Ok, that is what I saw as well. Does QuickBooks have a place to put itemized deductions or do I need to record that elsewhere in like an excel spreadsheet?

Ok, that is what I read as well but I wanted to double check. Does QuickBooks track itemized deductions someplace or will I need to record that in a separate program like an excel spreadsheet?

Hi there, @dmccth

You can use the class tracking feature in QuickBooks Online by making each line of business and personal transaction a separate class. By using it, you can track the associated account balances on transactions and run reports to view the account balances for a given class (business) at any time. Let me show you how.

To begin, turn on class tracking to add a class field or column on your forms. Here's how:

1. Go to the Gear icon and select Account and Settings.
2. On the left pane Advanced, then select the Edit icon in the Categories section.
3. Mark the Track classes checkbox. 
4. Select the Assign classes drop-down, then select One to entire transaction or One to each row in transaction.
5. Hit Save, then Done.

After that, you can create an expense where you can select the category of what you paid for. Additionally, when you tag a class to a transaction, you won't have to add classes again. But if a downloaded bank transaction doesn’t match with any existing transaction, you can assign a class to it and add it as a new record.

For more information about class tracking, I've attached an article you can use how to run reports and create a budget for each class: Get started with class tracking in QuickBooks Online.

You can always leave a comment below if you have other questions.

Thanks for the reply!

I'm completely new to being self-employed and quickbooks so forgive me if I'm not asking questions in the correct way.

When something is tagged to a class, will it show up as an expense? From what the previous poster mentioned, out-of-pocket health insurance is not considered an expense but an itemized deduction.

Thanks for the reply!

I'm completely new to being self-employed and quickbooks so forgive me if I'm not asking questions in the correct way.

When something is tagged to a class, will it show up as an expense? From what the previous poster mentioned, out-of-pocket health insurance is not considered an expense but an itemized deduction.

Thanks for getting this cleared up! I will start a spreadsheet or something for itemized deductions. I don't think I will have that many to track so not being able to do it in Quickbooks shouldn't be too much of a problem.