AMA: QuickBooks Self-Employed Edition! | Submit Your Questions Here

Good morning everyone! The QuickBooks Self-Employed AMA begins now! Today we're joined by Caitlin from the Tier 2 QuickBooks support team, along with Anusha and Karen who work on the QuickBooks Self-Employed product development team.

They're ready to answer all of your self-employed questions heading into tax time, so fire away! 

You can post your questions as comments and we will respond in thread. 

To kick us off, I'd love to share a question we see commonly in the QuickBooks Community:

"I am married filing jointly. My partner has W-2 income, but I am self-employed and use QBSE for my finances. Does this have any impact on how I file my taxes? Can I still do it through QBSE/Turbo Tax?"

Yes, you can! QBSE will help you organize your self-employed income and expenses for your Schedule C. Your partner's W-2 income, and your filing status, can be included on the tax profile in QBSE to help us choose the right tax rate, so we can better estimate what you should set aside for quarterly taxes.

But when it comes to filing your annual taxes, your partner's W-2 income will be taken into account by TurboTax.

Additionally, if you use the same login with QBSE as your TurboTax, we've made the process of filing easier by allowing you to export your data directly to TurboTax Self-Employed.

Another common question from community members! 

"What if I missed a quarterly tax payment? Do I need to do anything different with QuickBooks Self-Employed when preparing my year-end taxes to account for that?"

If you missed a quarterly tax payment, there is no additional steps you need to take during tax time in QuickBooks Self Employed. TurboTax or your accountant will take into account the quarterly tax payments you have made for the year and calculate your year end tax refund/liability. You may see a penalty related to the missed quarterly tax payment but that can only be computed during tax filing.

Here's another question from our QuickBooks Self-Employed community members:

"Is it possible to see how my estimated taxes are calculated? The amount is a lot more than I expected when I used the IRS worksheet."

You can see more information about how estimated taxes are calculated by clicking the estimated tax number in blue in QBSE, on the Quarterly Tax page.

QBSE takes into account your tax profile information (filling status, standard deduction, W-2 income and withholding), as well as projected taxable profit for the entire year. As the year goes on, these projections will get more and more accurate because they'll take into account more and more actual income and expenses. You can also manually edit these projections if you know, for example, that income or expenses will be different in certain months. Based on that, we then estimate your entire annual tax liability (not just for self-employed income), and use that to figure out what you should pay each quarter.

Our goal in doing the estimated tax calculations this way is to help you avoid having to pay a large amount when you file your annual taxes. The actual information we use to calculate is the same worksheet you would use from the IRS - it's just a question of what information goes into it.

The other method you can use to calculate your estimated tax is just to use last year's tax liability, rather than trying to project what you'll make in the coming year.

This article may also help: https://quickbooks.intuit.com/learn-support/en-us/tax-topics/estimated-taxes-explained/00/369288

Another question we've seen a lot this year: 

"I’m using a home office for my work this year and haven’t in prior years. How do I make sure I’m tracking all of that correctly in QuickBooks Self-Employed?:

There are 2 different methods you can use to claim a home office deduction for your self-employed. The first is a simplified method based on your home office square footage. The second method is an actual expense method which is based on the actual expenses for your home office. You should track the entire expense in QBSE and at tax time, TurboTax or your tax professional will calculate your actual deduction based on what percentage your home office over your entire home square footage.

You can track your home office deduction in QBSE on the annual taxes page for both methods listed above. At tax time, TurboTax or your tax professional will determine which method will get you a larger deduction.

If you only used your home office for part of the year, you will need to prorate the expenses. You can count a month if you used your home office at least for 15 days in that month. You can see more details about both methods here: https://quickbooks.intuit.com/learn-support/en-us/tax-topics/square-footage-why-it-matters-for-your-...

Time for another community question:

"I have QuickBooks Self-Employed by itself but I’d like to use TurboTax to file. Do I have to have the bundle for that?"

We have a tax bundle available which include QuickBooks Self Employed subscription and one free federal and state filing with TurboTax. This generally works out cheaper than paying for QBSE and TurboTax separately. That said if you currently have QBSE standalone, you can still export your QBSE data to TurboTax and pay for TurboTax separately.

Last question for the afternoon! 

"I have self-employed income but QuickBooks Self-Employed estimates my taxes to be $0. Why is that?"

There are a few possible reasons why your estimate might be $0:

• The projection of your profit for the year is $0 or negative. If you didn't make any profit, you shouldn't owe any tax on it. Quarterly tax estimates are actually based on your tax liability for the entire year.
• In QBSE, we adjust the projections as the year goes on, based on the actual income and expenses we see. If you made a lot more profit in a prior quarter, and paid that estimate, and then income goes way down in subsequent quarters, the new estimate of your annual tax liability may be low enough that what you've already paid covers it.
• You did make a profit, but any tax liability is already covered by withholding or by other factors, like the standard deduction. If you or your spouse has W-2 income with automatic withholding, then that may already cover any additional tax on your self-employed income.
• You haven't yet reviewed all your income and expenses.