In a recent discussion, I heard a lot of QuickBooks ProAdvisors comment that they had no interest in the fairly recent enhancement to QuickBooks Online Accountant to add QuickBooks Self-Employed Users.
The comments went something like this: "Those people will cost me more than I can make," or words to that effect. I heard the same thing in a forum with a group of tax professionals.
Well let's face it folks, small businesses are growing by leaps and bounds. College kids who were sitting in their parents basements without a job now are driving for Uber, walking your dog for Swifto, tripping out for TaskRabbi or delivering your gourmet via Ubereats.
What's common among most of these self-employed is that they're racking up the bucks and need to track their income and expenses, pay estimated taxes and file a tax return at year end.
QuickBooks Self-Employed is no longer in the infancy stage. The app has grown and matured substantially, and the ability of it to tie users to an trusted business advisor is just one enhancement that Intuit has made.
But these QBSE users also are very self-reliant. Many want the same convenience of a simple app when it comes tax time. That's why QuickBooks Self-Employed is the only version of QuickBooks that can transmit data to Intuit's TurboTax Online. Intuit has made it very convenient for QuickBooks Self-Employed users to upload their data directly out of QBSE into TurboTax Online.
So, let's assume I'm an Uber driver and that last year I made $7,350.00. I was able to track my income, mileage, vehicle expenses and other costs of doing business using QuickBooks Self-Employed. My end of the year looks something like this:
QBSE Income and Expense
As I mentioned, I also was able to track my mileage and vehicle expenses, which is pretty important if I'm going to drive Uber for a living, or at least play money.
QBSE Figure 2
So, when I hit the end of the year, my QuickBooks Self-Employed was able to spit out my 2015 Tax Summary. It may not be what we'd like to see, but it probably is just what our QBSE user was looking for. "Hey, I didn't really make a profit, because I got such a great deduction for my mileage. I'd never gotten that on a day job."
QBSE Figure 4
But as I said, Intuit has taken the QBSE user one step further. They have provided a direct link to link them to TurboTax Online and made it simple to turn QBSE data into Tax Return. Since QBSE data can only be exported to TurboTax Online once (for any tax year), it's essential that all information has been setup and coded properly in QuickBooks Self-Employed.
That's one area that some QBSE users maybe seeking out a trusted advisor to invite to assist them.
From the Annual Tax Page left-menu item, all they need to do is click the big green "Get TurboTax" button at the right side:
QBSE Figure 4
By the way, you'll notice that QBSE now has the same color changes implemented in QuickBooks Online and QBOA last month. So the "big green button" is an action item just like in QBO. The next action item is Export to TurboTax. All they do is follow the on screen instructions. I found it very simple.
In no time at all, my QBSE Income, mileage data, vehicle expenses and other business expenses had populated into my self-employed business that I called "Drivin' for Uber."
QBSE Figure 5
The results were identical to the information in QuickBooks Self-Employed, but my file was pretty simple. According to Intuit's instructions regarding the relationship between QuickBooks Self-Employed and Intuit TurboTax Online, there several things that may need manual attention (entry or at least double checking), including:
- Information for your home office will need to be entered manually in TurboTax Online, along with any 1099-K income, because these items do not import.
- 1099-MISC data entered in QuickBooks Self-Employed should not be re-entered in TurboTax Online.
- If a QuickBooks Self-Employed business uses multiple vehicles. Each additional vehicle will need to be entered in TurboTax Online manually, because QuickBooks Self-Employed doesn't handle more than one vehicle.
- Meal expenses reported in QuickBooks Self-Employed are imported at 100 percent deductible, TurboTax Online then determines the deduction percentage (50 percent for most businesses).
- QuickBooks Self-Employed estimated tax payments are computed so as to cover federal income taxes, not self-employment taxes that maybe due.
As you can see these are a few of the areas in which QBSE users, even those deciding to import their data into TurboTax Online may still need the assistance of a trusted business advisor or tax professional.
I say, don't write these people off just, because they may not be the biggest client in your client list. Today's Uber driver may be next year's entrepreneur, one who actually creates the next "Uber-like" start-up worth millions.