How to categorize transfers from one account to another and have them show up as expense on P/L rep

I use quicken to keep track of my business. I pay myself every two weeks by auto transferring funds in my personal checking account from the business checking account. I want to show my wages as a business expense that gets reflected in my profit and loss report. Right now, Quicken picks it up as just a transfer with no category attached. Any suggestions would be greatly appreciated.

Best Answers

  • volvogirl
    volvogirl SuperUser ✭✭✭✭✭
    Answer ✓
    First of all if you are self employment and file schedule C in your personal tax return you DO NOT pay yourself wages or expense them.  You are not an employee of the business. You don't pay yourself or enter a salary or withdrawal for yourself. All the business income and expenses are your personal income and expenses in the first place. You just fill out a Schedule C. The net profit or loss is your income.  If you have a net profit of $400 or more on schedule C you will pay SE self employment tax on it in addition to your regular income tax. It's all included on your personal 1040 form.  

    Then there is not a way to enter an income or expense category on a Transfer in Windows Quicken.

    If you file a separate Business tax return (like a LLC-S corp or 1120 or 1065) then you need to have the business set up in it's own separate Quicken data file from your personal file.    


  • DavidBrink48
    DavidBrink48 Member
    Answer ✓
    Great info!!! I think its time to get an accountant. Thank you!

Answers

  • volvogirl
    volvogirl SuperUser ✭✭✭✭✭
    Answer ✓
    First of all if you are self employment and file schedule C in your personal tax return you DO NOT pay yourself wages or expense them.  You are not an employee of the business. You don't pay yourself or enter a salary or withdrawal for yourself. All the business income and expenses are your personal income and expenses in the first place. You just fill out a Schedule C. The net profit or loss is your income.  If you have a net profit of $400 or more on schedule C you will pay SE self employment tax on it in addition to your regular income tax. It's all included on your personal 1040 form.  

    Then there is not a way to enter an income or expense category on a Transfer in Windows Quicken.

    If you file a separate Business tax return (like a LLC-S corp or 1120 or 1065) then you need to have the business set up in it's own separate Quicken data file from your personal file.    


  • DavidBrink48
    DavidBrink48 Member
    Answer ✓
    Great info!!! I think its time to get an accountant. Thank you!
  • TTSguy
    TTSguy Member ✭✭✭✭
    David , since I didn't read anything in your post about using it to file your taxes, I read that you're just wanting to be able to know in your personal account or business tracking account, expenses to track the total of the amounts you are transferring in from an account to another. I think when you said "pay yourself it misled volvogirl. When you do a transfer it's just that - a transfer. transfers can't be categorized, but something that will help is to use the "Tag" field and use the word "Pay". Then you can do a tag report at any given time to help track your cumulative pay to yourself. I mean for all we know maybe you don't pay taxes, and that not anyone's business. I also experience this when I try to use a split for SSA. I don't have a "Net Income" from SSA that I can do a report with... drives me nuts! Also I would put the "Pay" tag in the other side of the transfer to track at the same time. You will see a + and - on you tag report but you can figure that out easy enough This is neither the best way or correct way, but just "A Way" to accomplish what you're looking to do.
  • ElleEm
    ElleEm Member
    I am having this same issue. I pay my husband a monthly paycheck out of his business account. It is a salary, he is an employee of his business which is a corporation. However, when I pay him, I just transfer from the business account to the personal account. However, this does not show up in his profit and loss as there isn't a way to categorize a transfer. Short or writing a check to him instead of transferring I can't think of a way to get Quicken to recognize it as a legitimate expense. And that feels like a very archaic workaround. Any one know how to tackle this?
  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    edited February 2022
    Hi @ElleEm

    How is your husband's business setup?  Is he a "sole proprietor" or an S Corporation (sometimes called an "S Corp" by us old folks)?  It sounds like you are simply "paying" him what is known as a "draw" where you are not withholding anything from it and that includes taxes - is that true?

    If he is a sole proprietor and not an "S Corp" (or even a "C" corporation), then payments made to him are not deductible.  You should simply think of them as "advances".  Unlike a "salary" they are not deductible BUT they also are not "taxable income" to him.  If he is a sole proprietor, will be taxed on the "profit" that is calculated by taking his total income and subtracting his deductible expenses (on his tax return).

    Frankx


                            Quicken Home, Business & Rental Property - Windows 10-Home Version

                                             - - - - Quicken User since 1984 - - - 
      -  If you find this reply helpful, please click "Helpful" (below), so others will know! Thank you.  -

  • volvogirl
    volvogirl SuperUser ✭✭✭✭✭
    If he files a separate corporation business return then the corporation should be set up in a separate Quicken file from your personal data file.   It should have its own set of accounts.   Do you have an accountant?  You need one.   
This discussion has been closed.