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How to register income and expenses that are not in the bank account

Echo

I'm working on a project with a partner. We have a bank account, but both of us have paid for expenses from our personal accounts, and would like to account for those expenses in one budget. Do I make two additional credit card type accounts and report on the business bank account + credit cards? Any other ideas? Thank you!

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studpup

I would create accounts and log expenses there
Southwest Travel:Air $200
and put in extra transactions so the balance on that account is always zero and doesn't affect your net worth reports.
Contribution [Echo Contribution] $-200

NotACPA

@echo Does the project file a tax return? HOW are the income and expenses from the project reported to the IRS?

Those answers will lead to my responses to your questions.

Echo

We haven't yet filed (new project) but are an LLC and will file as a schedule c on both partner tax returns

NotACPA

I'm going to suggest a new and separate Q data file, since neither of you are 100% owners of the project.

Then, any income that you receive, or expenses that you pay, are transfers to/from the project and would be recorded as transfers to/from a new "Project" account that you set up in Q. Your Project account should start, in your personal Q data file, as ONLY the initial payments that you made to the account.

What Q product are you running, and we can go into this a bit deeper.

Echo

Thanks you! using windows subscription.

volvogirl

Sorry you can't file schedule C for it. You need to file a Partnership return or LLC return either a 1065 or 1120. You better see an accountant right away and get set up right. You will get a K-1 and maybe a W2 from the Business return to enter into your personal returns.

Echo

I'm so impressed with this community! Thanks for your eagle eye. I have already confirmed a process with my accountant, and must have the wrong name for the filing. Appreciate the great focus!