Hi everyone,
Background: First time Self-Employed person here. I have a business checking account and credit card for all business transactions. I pay my health insurance premiums myself out of a personal account, with no contribution from my business.
Problem: I understand that I can deduct my premiums if I pay them myself, and that the Health Profile will determine if I'm eligible or not. Once I've filled that out, though, how do I think about entering the transactions themselves and how they affect my books and analytics?
I'm paying for them out of pocket with my personal bank account, so it feels like a Personal expense. Entering them as a Personal expense, though, doesn't aggregate the payments in the Taxes page. Entering it as a Business expense aggregates it as a deduction under Taxes, so I gather that that that's the correct way to do it, but it's a bit confusing because it then shows as business spend on my Home page and Transactions page (and affects my All Spending and All Profit categories at the top of the Transactions page), but doesn't register as an expense on my P&L.
Questions: It's not being paid for by the business, it doesn't seem right for it to show up as business spend on my Transactions page, so will this be reported correctly to the IRS if it's in here as a business expense but paid for out of my personal accounts? How do I ensure that I'm analyzing my business correctly I relation to these? What is QBSE doing with these transactions, and how can I better think about this conceptually?
How does this feature actually work in full-scope from start to finish and how can I nail the concept down in my head?
