Categorize personal spending

Hi AJ20261. Regarding your weekly shopping money in QuickBooks Self-Employed (QBSE), you should categorize these transactions as Personal.
 

You cannot use the Expense category for these, as that is reserved strictly for costs related to running your business. Categorizing personal shopping as a business expense would result in an inaccurate report of your taxable income and could cause serious issues if you are ever audited.
 

The Transfer category in QBSE is intended for moving funds between two linked business accounts. Since you are moving money to an unlinked personal account, marking it as Personal is the best way to keep your reports clean and accurate.

To mark this as personal, go to your Transactions menu and select the Personal button on the transaction row.

However, everyone's tax situation is different depending on how the business is structured, I recommend consulting your accountant or tax expert about exactly how to categorize these transactions. That way you can be sure you're doing what's best for your taxes.

Feel free to comment if you have more questions about the feature or need more clarification. We'll be around to help you through your thread.

Thankyou for your reply.

Sorry I cant see personal in the transaction list.

In the transaction type, I have Expense, Cheque, Transfer and Credit card payment.

In the account/catergorise my bookeeper has set up a Loan_Owner.

Im not sure what to click on in the Transaction drop down?

thanks

Hi there, AJ20261.
 

I wanted to clarify that the answer previously shared by my colleague applies specifically to QuickBooks Self-Employed (QBSE). If you’re using QuickBooks Online (QBO), the options and workflow are different, which could explain why you’re not seeing the same transaction types.
 

Since the money is going to your personal bank account, it’s usually not recorded as a business expense. Instead, it’s commonly tracked through a separate account (such as a personal or owner-related account), so it doesn’t affect your business profit.
 

If you’d like to set this up, you can create an account in the Chart of Accounts:
 

1. Go to Settings , then select Chart of accounts.
2. Click New account.
3. Enter an account name (for example, Personal shopping or Owner draw).
4. For the Account type and Detail type, (it’s best to consult your accountant to ensure the account is set up correctly for your business and tax reporting).
5. Save the account.
    

Once created, you can return to the Bank transaction and Categorize the personal transaction to that account.
 

Refer to the image below: 
 

For accuracy and tax compliance, check the account type and usage with your accountant or bookkeeper before proceeding.

If you have further question or concern, feel free to leave a comment to this thread.