Do I categorize a construction draw received as income? or something else? I flipped a property and used a hard money lender.

Hi there, @lwyche-ffl-gmail.

I'm here to help you categorize your transactions in QBSE. In that way, you'll be able to know what areas of your self-employed business have the biggest impact.

You just need to identify if the transaction is for personal income or business income. It will be included in your estimated tax if that's for business income. Then, if you want to exclude it, select personal income. Here's how:

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. Select a general type, and choose a more detailed category.
6. When you're done, select Save.

For more information about categorizing transactions, I suggest checking this article: Categorize transactions in QBSE.

To ensure that you'll be able to organize your transactions properly, I'd recommend checking the different categories below that you can use in the system:

• Categories in QuickBooks Self-Employed
• QuickBooks Self-Employed Schedule C Categories breakdown

The Community is always open if you have other questions about categorizing transactions. I'll be around to help. Wishing you a great day ahead!

@lwyche-ffl-gmail 

A construction draw is a liability since you owe it to the lender.  Set up a liability account for the loan, then deposit the draw into your bank account and assign it to the new liability account.  That will put the funds in your bank account and record a corresponding amount as a liability due to your lender. 

How do you record the draws received from the bank for the loan

Hey there, @eregalado.

I'd like to know what product you are using. So I'll be able to provide the proper steps for recording the draw in your QuickBooks account.

Please don't hesitate to share them in this thread. I'm more than happy to guide you along the way. Take care.

Quickbooks Desktop for Contractors

Thanks for joining in the thread, @Dr_Kinu. I have all the steps to help you track loans in QuickBooks Desktop (QBDT).

You'll first have to set up a liability account to record your loan and its payment. I'll guide you on how:

1. Go to the Lists menu, then select Chart of Accounts.
2. Right-click anywhere, then select New.
3. Select Other Account Types, then select the correct account type for your loan.
4. Select Continue.
5. Enter the name and number of the account.
6. Select Save & Close.

Then, create a new vendor for the bank or company you need to pay for the loan:
 

1. Go to the Vendors menu, then select Vendor Center.
2. Select New Vendor.
3. Enter the bank's name or the company you need to pay for the loan.
4. (Optional) Enter other vendor details such as phone number and email address.
5. Select OK.

After that, create an expense account so you can track interest payments or charges:

1. Go to the Lists menu, then select Chart of Accounts.
2. Right-click anywhere, then choose New.
3. Select Expense, then Continue.
4. Enter the account name for the interest payments or charges.
5. Select Save & Close.

Now that you have a liability account for the loan, you can record the loan amount. You can proceed to step 4 in this article which details the process: Manually track loans in QuickBooks Desktop.

Moreover, if you want to keep track of your loans and be reminded about upcoming payments, you can track and manage your loans with the QuickBooks Loan Manager.

 We're all ears if you have further clarifications about the process. Feel free to leave a reply below and we'll get back to you.