Using Quicken for Business...I need to classify my Net Salary correctly

I need to set up a category to record my Net Salary but am uncertain I am classifying it to the correct tax schedule/line item.
Would anyone be able to help with my question?

Answers

  • Frankx
    Frankx SuperUser ✭✭✭✭✭
    Hi @Narnia

    Yes, I think there are a lot of people here who can help you.  Please give us some more details about what you are concerned about and we'll be sure to give you some good advice.

    Frankx

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  • volvogirl
    volvogirl SuperUser ✭✭✭✭
    Are you paying yourself from your business?  What kind of business entity?   Will you give yourself a W2 at the end of the year?   

    If you are a Single Member LLC, self employed, independent contractor or sole proprietor you probably file schedule C in your personal tax return for it.  Sole proprietors cannot take a withdrawal or salary and include it as an expense on their tax return. As a sole proprietor, 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.  


    So just categorize it to whatever you spent it on or as a transfer to another account.

  • Narnia
    Narnia Member
    I am creating a new category for paychecks. My question is if I have this properly setup:

    JOHN'S NET SALARY
    * Income
    Tax Reporting
    * Standard line item
    - Schedule C-wages paid
  • volvogirl
    volvogirl SuperUser ✭✭✭✭
    If it's your Schedule C  business you do not pay yourself wages.  Read my post above again.