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Level 1

Expense categories

Hello! I'm a photographer and have my business as a sole proprietorship.  I'm a little confused with determining which expense category is the correct one to use for certain transactions. Here are a few examples, if anyone can help me figure out which category each transaction type should go under in quickbooks self-employed:

 

1st transaction: Printing costs for ordering a client's photo prints through another website.

  • This would kind of be my "cost of goods sold" because for example, I'll have a customer buy $20 worth of photo prints through my online store and I report their purchase as income, but it costs me around $12 to order those prints from a printing lab. So I basically only made an income of $8 instead of the $20. I'm not sure what category in quickbooks self-employed to list this under.

 

2nd transaction: monthly subscription paid to Gmail for having my domain as my email instead of @ gmail.com. 

  • I pay $5 a month for a "g-suite" which basically allows me to use my domain as my email instead of Gmail as my domain. I currently have this transaction categorized as "Apps/Software/Web Services" but don't know if this would be the correct category.

3rd transaction: a online client management software that I pay a monthly subscription for called HoneyBook. 

  • this online software is basically my virtual assistant and helps me manage all of my client projects for my business. I pay a monthly subscription of $40 for this. I currently have it listed under "Apps/Software/Web Services" but I don't know if this is correct either. HoneyBook gives you the option to pay your subscription up-front for the entire year as well, so I was wondering if I pay upfront $400 instead of monthly payments of $40, what category can I list this under? Would it fall under depreciation by any chance or is depreciation only for physical assets, like my camera and lens?

 

4th transaction: monthly subscription for quickbooks self-employed. 

  • I also have this under "Apps/Software/Web Services" category, but not sure if this is correct or not. 

 

If anyone can just let me know which category each transaction should go under, I'd really appreciate it!

4 Comments
Highlighted
QuickBooks Team

Expense categories

Hello there, vasvaomanovic.

 

I'd like to share some helpful information about expense categories in QuickBooks Self-Employed.

 

While we're not able to provide which expense category to use for a specific transaction, allow me to share a list of categories that you can choose from. 

 

For the first and third transaction, QuickBooks automatically categorize them as Other business expenses. 

 

You may want to refer to this article to learn more: Other business expenses.

 

On the note, for your second and fourth transaction, you can check out this article: Taxes and licenses.

 

Given all the information, I'd still recommend consulting an accountant to help and guide how to record these transactions. Your accountant can provide more expert advice in dealing with this concern.

 

Should you have follow-up questions about expense categories in QBSE, please don't hesitate to drop me a reply and I'll be sure to help.

Highlighted
Level 1

Expense categories

So can you not add a category? I run a services business and have some product but mostly service. I have different types of supplies for different aspects of the biz. I would like to have my own (at least) sub categories so I can read and organize my reports.....

 

Thanks

Jen

Highlighted
Anonymous
Not applicable

Expense categories

Hello, Jen.

 

Creating custom categories is unavailable in QuickBooks Self-Employed. You’ll need to utilize the ones that are generated by the system. These categories are in line with the IRS Schedule C to ensure your estimated taxes are reported properly. 


For now, I’ll make sure to share this feature with our developers for future updates. 


Visit us again if there’s something else that we can help you with.  
 

Highlighted
Level 15

Expense categories

@vasvaomanovic 

 

QBSE is so limited, QBO or desktop would be a better choice

1. the price you pay for prints is not COGS, it is an expense, job expense. COGS when you file taxes (Which by the way QBSE will not handle inventory or cogs) revolves around inventory cost when sold. Paying for printing is not using your inventory.

 

2. subscriptions, in QBSE I would use legal and professional services expense. app subscriptions, QBSE subscription, etc etc

 

Paying the lump sum annual amount for a subscription is still the same expense as if you paid monthly. And technically it should post to an asset account called pre-paid xxxxx and each month you move the monthly amount out of that account and into an expense account - something QBSE can not do either

 

QBSE does not allow for any new accounts (categories) to be created
QBSE does not have sales receipts, only invoices
QBSE does not have the class function
QBSE does not do recurring transactions
QBSE does not keep a customer or job listing
QBSE does not have a balance sheet so you can not enter the cost or the depreciation for a car/equipment
QBSE does not do inventory or cost of goods sold
QBSE can not do payroll
QBSE does not do any associated IRS forms, like home office deductions or depreciation
QBSE will not accept a banking file formatted as .qbo (a standard intuit type of file)

QBSE does not do sales tax either (not schedule C related but critical to a business)

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