QuickBooks Self-Employed: Spotlight On Schedule C Clients & Use Cases

QuickBooks Self-Employed: Spotlight On Schedule C Clients & Use Cases

I can’t believe that we are at the end of year! As I look back, I think of all the advice I gave clients and friends, and wonder how they are doing. One couple, Angie and Tom, come to mind.

Angie and Tom are married and file a joint return. Angie works full time and receives a W2 from her company at year end. Tom owns an equipment repair shop and files a Schedule C. He does not have any employees and does not have any inventory, since most of the parts he needs are special ordered for a specific repair job.

Each year, Angie gets piles of receipts and invoice copies from Tom, and lists them for the tax preparer. The couple have used the same tax preparer for years, so Angie assembles all the documents and a listing of Tom’s expenses and income, and sends the package to their tax preparer.

In 2017, the preparer sent Angie a link for her to submit 2016 documents electronically. She could now upload scanned documents, and enter Tom’s Schedule C income and expenses online. Angie called me regarding the online form – and it turned out there were fewer expense categories; she was upset that the preparer did not use her format. As a result, I helped Angie summarize and group Tom’s income & expenses for 2016.

I also talked to both Tom and Angie about using QuickBooks® Self-Employed for 2017. We discussed the advantages and perceived issues:

  • Tom was concerned that he did not have any mileage and did not want the mileage tracker. After a long discussion, we realized that he had been driving around town several times a week to get parts for years and had never deducted any mileage expense.
  • I also talked to them about linking bank accounts to the QuickBooks Self-Employed, and Tom was concerned about security. I explained that QuickBooks Self-Employed has better security than his shop where he keeps his paper that doesn’t have an alarm system or fire sprinklers.
  • Tom’s final issue was that he likes to pay most bills with cash, so if we link to his bank account, there are plenty of expenses that would not be included. I discussed the “Snap & Store” feature for cash expenses. I also mentioned that I would expect that some cash expense may have been omitted in the past if the invoice was lost.

Tom finally agreed to try QuickBooks Self-Employed in the hope it would report his expenses accurately and save Angie hours of time summarizing records. I have a feeling their tax preparer was also quite happy with the decision.

The reason why Tom and Angie come to mind is that they live in Southern California very close to a major fire, and many of their friends and family evacuated and a few of their friends lost their homes. Angie and Tom are still busy helping in the community and Angie will not have to spend time summarizing Tom’s records this year. That’s a real time savings!

Editor’s note: This is the fourth articles in a four-part series by Ilene Eisen on QuickBooks Self-Employed.  Be sure to read her other articles: