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SlowDrawing
Level 1

Complex transaction split

I have a Comcast account for which I receive a single bill for three services:

- Internet

- Business Phone

- Home Phone

The transaction goes to my business credit card (always paid in full, so no interest charge complications.)

I forgot this was happening in 2020 (distraaaaaccccttttted), so I need to fix it.

 

I see how to split a transaction, so I can split each transaction for 2020 into the three parts.

 

I also have a "payee" that I use to pay myself as an employee for expenses that are not charged to a business account.  I do that through a bill that breaks out the charges by category.

 

I'm thinking maybe the thing to do is take the home phone bill portion of the Comcast bills and assign it as an offset to my expense report bill.

 

However, don't know what Quickbooks "account" I should have and use for that purpose.  I'm thinking "Employee Personal Charge".  And then show that on the expense report bill to reduce the payout for that bill.

 

Does this make sense?  Any suggestions on better ways to handle this?

 

 

4 Comments 4
john-pero
Community Champion

Complex transaction split

There is only one situation where you should or can consider yourself an employee and that is if you are an S corp or an LLC electingbto be taxed as a corp.  

 

And then you could bill yourself, treating the home portion as a business expense billed to you and reimbursed by check as income or counted as a portion of your distributions after W2 wages.

 

My hunch is you are not the above and thus personal expenses paid by your business is simply Owner Draw (equity)

SlowDrawing
Level 1

Complex transaction split

Thanks for the response.

I may not have explained the situation clearly.

(I'm going to leave the question of my status as an "employee" to my tax guy.)

What happened is that my Comcast bill includes business internet, business phone, and home phone.

I paid the Comcast bill with my business credit card.  This effectively caused the home phone bill to be paid by the business.

Throughout the year, I sometimes buy things for the business on my personal credit card.

At the end of the year, I create an "employee expense report" and submit it to the S Corp as an itemized bill for reimbursement (itemized so the various expenses go into the correct categories.)

What I ended up doing is creating an account "Employee Personal Expenses" (which could be renamed "Owner Personal Expenses").

I split the Comcast credit card transaction to assign the home phone portion to the "Employee Personal Expenses" account.

Then I modified the employee expense report bill to include a negative amount representing the total of the home phone bills, reducing the reimbursement.

When I ran the trial P&L, the "Employee Personal Expense" account balanced out.

My tax guy will let me know if that needs to be revised, when I submit my QKBKs for tax filing in March.

 

AlexV
QuickBooks Team

Complex transaction split

Hi there, SlowDrawing.

 

Let me join this thread so I can share more details about profit and loss.

 

The most possible reason why the profit and loss report has incorrect balances is due to the date. We need to make sure that the transactions were recorded on the dates that you've set in the reports.

 

We can pull up the Transactions Details by Account report. That way, you can verify and view the transactions recorded per account.

  1. From the Reports menu.
  2. Hover over Accountant & Taxes and select Transaction Detail by Account.
  3. Set the date range of the transactions.
  4. Click the Refresh button.

I've added some articles for your reference:

Keep on posting if you have more questions. I'll be here!

SlowDrawing
Level 1

Complex transaction split

Hi, thanks for the response.  I have apparently produced more evidence that I don't understand accounting lingo :-)

When I said the "Employee Personal Expense" account "balanced out" I intended to mean "balanced to zero, correctly".  I can see why "balanced out" could be interpreted as "was out of balance".

Educational! 

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