How should I record this in Quicken
RaeKC888 Member ✭
edited April 2022 in Registers & Transactions (Windows)
I paid for our business insurance expense with my personal credit card. I then paid that payment from our business checking to that credit card company. My question is, how should I set up that category account in Quicken? It can be checked as part of Income (like a draw) or as an expense. I'll be paying the water bills that way in future too. So I want to set up the categories correctly for my end of year reports.
Quicken is really only designed for situations where "Schedule C" is used to report taxes. If your business entity doesn't use Schedule C then Quicken really isn't set up for that. The best solution in this situation, in my opinion, is to put the business in a file that's separate from your personal finances and swing the sort of transaction you're describing through offsetting balance sheet Accounts in the two files.However, if you do use Schedule C then the accounting is easier and there's no need to resort to any head-scratching Categories or set up "special" Accounts for these type of events. The reason for this is that in a Schedule C situation there's really no distinction between "you" and the "business" beyond the need to keep "personal" income and expenses (e.g., W-2 income, groceries, etc.) distinct from "business" income and expenses (e.g., invoices to clients for services rendered, business supplies, etc.) Every Account in your file is "yours." Sure, it's a good idea to have a separate business checking Account but the money in that Account is as much "yours" as the money in your personal checking Account and moving money back and forth between those Accounts isn't a reportable transaction, in the same fashion that moving money from your Savings Account to your personal Checking Account doesn't need reporting.So, "I paid for our business insurance expense with my personal credit card." That's fine, you need to create a "business" Insurance Expenses Category, a Category that you've assigned to Schedule C, and code that credit card charge to that business Category. If you then paid that credit card charge out of your Business Checking Account, that's not an expense to the business, that expense has already been captured when you entered the credit card charge in your Credit Card Account. It's simply a transfer from the Business Checking Account to the Credit Card Account.
And one thing I like to tell business people using schedule C is...For an income or expense category to show up under Business you have to assign it a Schedule C tax line number. Go into Edit Category and assign it one.If you need to see a schedule C, here's the blank form….You can either assign the tax line number to an existing category or you might want to set up a new category for it to keep the existing one under personal if you have the same expense for both personal and business.To check the tax line assignment open the Category list by either clicking on the Category Icon or go to Tools-Category List or Ctrl+Shift+C. Then select the category and right click on it to Edit it. Click on the Tax Reporting Tab and check the box for Tax related and pick a Schedule C: tax line item.0
Oh and make sure you are entering the credit card the right way and not trying to split out the payment when you pay the bill.The proper way is to set up a credit card ACCOUNT and enter the charges into it when the purchase is made and assigning it to a category. Then when you pay the credit card bill you TRANSFER the payment from your checking account to the credit card account (not a category). Then if or when you download the payment from the bank you match it to the one you already entered.When you enter the payment in your checking account you put the credit card account name in for the category using square brackets around the name to indicate it is a transfer...like this… [credit card] or newer Mac versions have a separate Transfer column.I used to do it the wrong way for years! Then I wised up and now enter them properly. I would split my credit card payment into all the categories on one transaction in my checking account. And since I always pay more than the bill I would need to figure the difference and put it to another category. But then I needed to have them entered on the date the charges actually happened. So I finally set up a credit card account. It makes it much easier to enter and balance!
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