Categorize transactions in QuickBooks Self-Employed

Each time you download a transaction from an online bank account or enter it manually into QuickBooks, you need to categorize it. When you categorize, QuickBooks puts your transactions on the correct line of your Schedule C. This also organizes your income and expenses so you know what areas of your self-employed business have the biggest impact.

Categorize a transaction

Categorizing a transaction is the process of organizing your income and expenses. You do this by reviewing downloaded or manually entered transactions and assigning them as "Business" or "Personal," as well as the specific transaction purpose (for example, “Vehicle” or “Gas and fuel”).

On a web browser

1. Go to the Transactions menu.
2. Find a transaction on the list.
3. Select Business if the transaction was for business, or select Personal for personal. If the transaction was both, select Split.
4. Review the category in the Category column. QuickBooks tries to categorize transactions for you.
5. If you need to change the category, select the category link.
6. Select a general type, and choose a more detailed category (for example, to add a gas charge select Vehicle, then Gas and fuel ).
7. When you're done, select Save.

On an iPhone or iPad (iOS) or an Android phone or tablet

1. If you're on an iOS device, go to the Transactions menu. If you're on an Android device, select the menu ☰ icon and then Transactions.
2. Find a transaction on the list.
3. Swipe left to categorize it as Business or right for Personal. If the transaction is a mix of both, select the transaction and then select Split.
4. As you swipe, review the category QuickBooks selected in the banner.
5. If you need to change the category, select the category link, then choose a new category.

Tip: You can create and manage category rules to quickly categorize common expenses and income.

Income and expense categories in QuickBooks Self-Employed

Your personal and business income and expenses may be in the same accounts you connect for online banking. QuickBooks Self-Employed makes it easy to separate your personal income and expenses, making sure the right money is included in financial reports and Schedule C.

Expenses

Negative transactions on the Transactions menu are expenses. You can mark expenses as Business or Personal. There are many expense categories in QuickBooks that match with specific lines on your Schedule C.

Business income

Positive transactions on the Transactions menu are income. You should mark income from your self-employed business as Business. QuickBooks includes business income when it calculates your estimated taxes and it also shows up on your financial reports.

Only categorize money that comes from self-employed work as business. This includes receipts or sales, including amounts reported on 1099 forms issued by clients or where you provide services. Other types of business income include any bad debts you recovered (if they were written off on prior-year tax returns) and interest from business bank accounts.

Personal income

You should categorize all money that's not part of your self-employed work as Personal. This includes income from others who share your bank accounts. Personal transactions and deposits, such as regular paychecks from an employer (as long as it has taxes taken out), should also be marked as Personal.

Example: Let's say you have a "regular" W2-type day job that gives you a paycheck every 2 weeks. It already has taxes and other deductions taken from it. You also work nights and weekends as a personal chef, which pays you per job, in full, without any deductions. Your day job is personal income, but your chef job is business income since it's from self-employed work.

Edit or recategorize a transaction

On a web browser

1. Go to the Transactions menu.
2. Find the transaction you want to edit.
3. Select the ▼ icon to expand the transaction.
4. Edit the transaction name, add notes, or attach a receipt.
5. To change the category, select the link in the Type or Category column, then select a new category.
6. When you're done, select Save.

On an iPhone or iPad (iOS) or an Android phone or tablet

1. If you're on an iOS device, go to the Transactions menu. If you're on an Android device, select the menu ☰ icon and then Transactions.
2. Select the Reviewed tab.
3. Select the transaction you want to edit.
4. Select Edit.
5. Change the details or category.
6. When you're done, select Save.

Related links

• Connect bank and credit card accounts to QuickBooks Self-Employed
• Categorize money transfers in QuickBooks Self-Employed
• Split transactions in QuickBooks Self-Employed