How to reimburse myself for business expenses paid with personal accounts

Previously, I used Quicken for personal finances and Quickbooks for business finances.  Now I'm trying to use Quicken H&B for both but it's not working out very well.

I often use my personal accounts to pay business expenses.  Each month I write up an expense report and transfer the total from business checking to personal checking.  I need to categorize the business expenses.  I can't find a way to record a single transfer in the personal account while tracking the category of each expense in my business account.  Please help!

Best Answer

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited February 2019 Accepted Answer
    Quicken Home and Business is designed for business activity that gets reported on Schedule C or Schedule E as part of you personal Form 1040.  It just doesn't work very well if you are trying to account for a business that's separate and distinct from "you", i.e., a sub-S Corp or a C-Corp.

    EVERYTHING inside that Quicken file is considered "yours"; it's you personal activity and your business activity all bundled together.  That's exactly how the IRS looks at it to.  So transferring money from your "business" checking account to your "personal" checking account is simply moving money from one pocket to another; it's not an "expense" it's not an "income", it's just a transfer.

    You have two ways of going here.

    1. Leave things as they are and when you pay business expenses from your personal checking account, simply code them in Quicken, appropriately, as business expenses.  Then, when you move money from the business checking account to your personal checking account, that's a simple transfer, no different from moving money from your savings account to checking.
    2. Mimic what you were doing when your were using Quickbooks.  That is, put all business activity in a file that accounts ONLY for business activity.  That way you can still submit expense reports "to the business".   In the business file you'd record those as various expenses, with a credit to a liability Account.  When you moved money out of the business Account the offset would zero out that liability Account.  The accounting in your own file would be exactly the opposite; an increase in the checking Account that zero's out the receivable Account.

Answers

  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited February 2019 Accepted Answer
    Quicken Home and Business is designed for business activity that gets reported on Schedule C or Schedule E as part of you personal Form 1040.  It just doesn't work very well if you are trying to account for a business that's separate and distinct from "you", i.e., a sub-S Corp or a C-Corp.

    EVERYTHING inside that Quicken file is considered "yours"; it's you personal activity and your business activity all bundled together.  That's exactly how the IRS looks at it to.  So transferring money from your "business" checking account to your "personal" checking account is simply moving money from one pocket to another; it's not an "expense" it's not an "income", it's just a transfer.

    You have two ways of going here.

    1. Leave things as they are and when you pay business expenses from your personal checking account, simply code them in Quicken, appropriately, as business expenses.  Then, when you move money from the business checking account to your personal checking account, that's a simple transfer, no different from moving money from your savings account to checking.
    2. Mimic what you were doing when your were using Quickbooks.  That is, put all business activity in a file that accounts ONLY for business activity.  That way you can still submit expense reports "to the business".   In the business file you'd record those as various expenses, with a credit to a liability Account.  When you moved money out of the business Account the offset would zero out that liability Account.  The accounting in your own file would be exactly the opposite; an increase in the checking Account that zero's out the receivable Account.
  • NotACPA
    NotACPA SuperUser, Windows Beta Beta
    edited February 2019
    I'm going to probe deeper into a question raised by Tom Young ... HOW does your business report to the IRS?  Is it on your Form 1040, or does it file it's own return?
    IF the business files it's own return,  it belongs in a separate Q data file,  where the amount that you pay from  your  personal account would be recorded as a PAYABLE in your business file.
    IF the business files on your return, the payments from your personal account would be a RECEIVABLE that that the business account would reimburse.  This is also how it would work in the personal file if the business files it's own return.
    Q user since DOS version 5
    Now running Quicken Windows Subscription, Home & Business
    Retired "Certified Information Systems Auditor" & Bank Audit VP
  • Clemont
    Clemont Member
    My business is a single-owner LLC that files on Schedule C of my 1040.
This discussion has been closed.