I have a small business and my husband gets paychecks. We file for taxes jointly so I need to categorize his income correctly. I'm curious if I should be marking his personal income as "income" or "paycheck"? What is the difference between the two?
If you share bank accounts with your husband in QuickBooks Self-Employed (QBSE), their paychecks and deposits should be marked as Income. Personal income should be any positive amount deposited to your accounts that doesn't come from your self-employed work. It is also excluded from the calculations we do for estimated taxes.
When filing jointly, you'd want to enter how much income your spouse is earning. You can add include it in the Tax Profile setting. This way QuickBooks will be able to estimate your total household income.
On the other hand, business income includes money that comes from your self-employed work. Any money given to you as a gift doesn’t count as income on your taxes. You can record it QuickBooks and tagged it as a Personal Income. This is for tracking purposes only.
Meanwhile, even if you're filing jointly, you can only track your self-employed related-income in your existing QuickBooks Self-Employed account. If your husband is also self-employed, he'd need to have a separate QuickBooks Self-Employed account to track his income and expenses.
Lastly, I'd suggest consulting with an accountant so you'll be guided properly in tracking your self-employed related income and expenses.
Swing by here if you have other questions. I'm always here to help.
Thanks for your help. I just want to make sure, since I'll be inputting my QB reports into TurboTax, that everything is categorized correctly before I begin. I already have my husband set up in my QB as a joint file, however, this past year was a little complicated as he was laid off in the middle of the year. I understand that his paychecks up until then had taxes taken out as did his unemployment checks (still not sure why those would be categorized as "income" and not "paycheck", though. Searched all over QB help, could not get any information on when it's appropriate to use "paycheck" to categorize, and yet it exists....). However, he has been receiving monetary help from his mother while looking for work, and she's been careful not to exceed the gift threshold so that it should remain untaxed. Am I to assume that if I mark those gifts as "income", it will not be taxed, just like his paychecks will not be taxed (twice)? Also, when would you mark something as "deposit"? Never? Just always "income"? Specifically, a check or cash gift deposited into our account by ATM or mobile deposit. I appreciate you guys sending links for more info, but unfortunately they don't answer my questions.