QuickBooks Self-Employed is accounting software for self-employed individuals required to file a Schedule C IRS form, such as freelancers, real estate agents, Uber drivers, and independent consultants. Pricing plans start at $15 per month. You can track income and expenses, mileage to and from clients, and file your taxes with the QuickBooks Self-Employed Tax Bundle.
If you’re currently using an Excel spreadsheet or stuffing receipts in a shoebox, it’s worth upgrading to the QuickBooks Self-Employed Tax Bundle. You can scan and categorize expenses from the mobile app easily. You can also pay estimated quarterly taxes and file a federal and state tax return at no additional cost. For a limited time, you can sign up for $1 per month for your first year.
How QuickBooks Self-Employed Works
QuickBooks Self-Employed is a cloud-based, small business accounting software that can be accessed from any computer or mobile device connected to the internet. It can synchronize with your checking and credit card accounts automatically to download your transactions. You should then classify the transactions into business categories or mark them as personal.
QuickBooks Self-Employed saves you time by learning from your prior classifications and making suggestions that you can either confirm or change. When all your transactions have been downloaded and classified, you can print profit and loss reports to report your business income on Schedule C of your personal tax return.
There are also advanced features in QuickBooks Self-Employed that go beyond merely summarizing transactions. You can use QuickBooks Self-Employed to:
- Track your business mileage
- Attach images of receipts to transactions
- Create due date reminders for quarterly tax payments
- Transfer income and expenses to TurboTax (with the purchase of the TurboTax bundle)
Who QuickBooks Self-Employed Is Right For
QuickBooks Self-Employed is ideal for self-employed taxpayers who report their income on Schedule C and pay most of their expenses with a debit or credit card instead of writing a lot of checks. QuickBooks Self-Employed doesn’t have a payroll add-on, so if you have employees, you might want to consider QuickBooks Online.
In general, QuickBooks Self-Employed is best for individuals or businesses that:
- Report business income on Schedule C of Form 1040.
- Pay a majority of expenses using a debit card, credit card, or cash.
- Do not need to print checks from the software.
- Do not have employees.
- Do not employ contractors paid more than $600 per year.
- Pay estimated taxes quarterly.
If you employ independent contractors that are paid $600 or more in a calendar year, then you will need to file a Form 1099 annually. QuickBooks Self-Employed will not do this for you, so you’ll have to do it manually or hire someone. Alternatively, QuickBooks Online will help track contractors and prepare the required annual filings.
QuickBooks Self-Employed Cost & Features
QuickBooks Self-Employed has three pricing plans that range from $15 to $35 per month, depending on whether you want tax returns included and live certified public accountant (CPA) assistance. All of the plans include tracking of income and expenses, tracking of mileage using the mobile app, and invoicing customers.
QuickBooks Self-Employed offers the following three pricing options:
QuickBooks Self-Employed Tax Bundle
QuickBooks Self-Employed Live Tax Bundle
Create Customer Invoices
Separate Personal Expenses From Business Expenses
Calculate Quarterly Taxes Automatically
Pay Quarterly Taxes Online Directly From QuickBooks
1 Free Federal & State tax return with TurboTax
Automatically Transfer Income & Expenses Into TurboTax
Unlimited Live Help From TurboTax Tax Experts
TurboTax Tax Experts Can Review Your Final Return
The monthly fee for the tax bundle and live tax bundle includes one federal return, which should be sufficient for a self-employed taxpayer. It also includes only state return, which may not be enough if you derive income from more than one state. Each additional state return will cost $45.
QuickBooks Self-Employed Features
QuickBooks Self-Employed includes many features that help you organize your income and expenses. These features include the ability to track your mileage, connect your bank and credit card accounts, separate personal from business expenses, upload receipts, and print profit and loss (P&L) reports.
Track Your Mileage Automatically
If you drive for business reasons, you can deduct a standard rate per mile or actual vehicle expenses. QuickBooks Self-Employed has a mileage tracker app that you can download on your Android or iOS phone. It will track the start and stop locations for all of your trips automatically.
Here is a screenshot of the QuickBooks Self-Employed mileage tracker app:
Connect Your Bank & Credit Card Accounts
You can download your bank and credit card transactions directly into your QuickBooks Self-Employed account. From there, you can categorize each transaction to the appropriate account to complete your Schedule C.
Separate Personal Expenses From Business Expenses
It’s easy to separate your business and personal expenses by setting up a category for personal expenses during the bank account setup. Any payments from your bank account not related to your business should be categorized as personal expenses so that they are not deducted on your tax return.
For example, if you pay your personal mortgage or rent from your business checking account, those transactions will be downloaded automatically into QuickBooks Self-Employed with your banking activity. You must classify the mortgage or rent payment as a personal expense so that it’s not deducted for tax purposes.
There is no law preventing a schedule C business from paying personal expenses out of their business checking account, but it is not a good practice. It’s better to keep business and personal activity in separate checking accounts with a periodic transfer from your business checking account to your personal account as needed for personal expenses. An IRS audit will go much smoother if the government can see your business activity separate from personal.
Attach a Receipt to a Transaction
The QuickBooks Self-Employed mobile app for iPhone and Android allows you to take a picture of a receipt and attach it to a transaction directly from your mobile phone. Not only will this save you time, but it will also provide the necessary documentation required by the IRS to deduct an expense.
Calculate Quarterly Tax Payments
Based on the tax profile that you complete during setup, QuickBooks Self-Employed will project your annual profit, calculate your estimated tax payment, and alert you of tax due dates. This valuable tool helps protect you from an underpayment penalty as a result of not making the required quarterly estimated tax payments.
Print Income and Expense Summary
You can view and print a summary of your taxable income and expenses at any time of the year. If you aren’t subscribing to the Tax Bundle, you can use this summary to input your Schedule C information manually.
Access Real-time Data
There is a dashboard on the homepage of QuickBooks Self-Employed where you can see your most up-to-date information:
The QuickBooks Self-Employed dashboard has the following information:
- Left menu bar: Navigate to each area of the program using the left menu bar.
- P&L: View total income and expenses in this section for any timeframe you specify, such as this month, last month, this year, or last year.
- Expenses: View your total expenses in this section for the timeframe that you specify, such as this month, last month, this year, or last year.
- Accounts: View the current balance of all bank/credit card accounts connected to QuickBooks Self-Employed.
- Invoices: View current accounts receivable balances in this section.
- Mileage: View the total mileage recorded using the QuickBooks Self-Employed mileage tracker app.
- Estimated taxes: Review the estimated taxes you owe, based on an automatic calculation performed by QuickBooks Self-Employed from the income and expenses you have recorded.
QuickBooks Self-Employed Tax Bundle Features
In addition to the features of QuickBooks Self-Employed, the Tax Bundle includes one federal and one state individual income tax return per year, including a Schedule C for your business. Best of all, you can automatically transfer the income and expenses from QuickBooks Self-Employed to TurboTax. Choose this plan if you expect to prepare your own return as it includes the federal and state return for the same price as the federal-only return if TurboTax is purchased separately.
Transfer All Information to Schedule C in TurboTax
The QuickBooks Self-Employed Tax Bundle includes a subscription to TurboTax. You can transfer all of your Schedule C information automatically into TurboTax to complete your tax return. You should choose this plan if you prepare your own taxes.
File Both Federal & State Taxes
QuickBooks Self-Employed Tax Bundle includes both a federal and state tax return for $120 per year ($10 per month extra). Purchased separately, TurboTax Self-Employed is $120 and does not include the state return.
Pay Quarterly Federal Tax Online
While QuickBooks Self-Employed will calculate your quarterly tax liability, the Tax Bundle allows you to pay the quarterly tax online. QuickBooks Self-Employed Tax Bundle will help avoid a federal underpayment penalty but does not include state estimated tax payments, which might be due depending upon where you live.
QuickBooks Self-Employed Live Tax Bundle Features
The QuickBooks Self-Employed Live Tax Bundle includes all the features of the other two plans but adds year-round unlimited tax advice from a tax professional, including a review of your tax return. The tax experts are either CPAs, enrolled agents (EAs), or attorneys. Choose this plan if you file your own taxes but would like an expert to look at your work and answer questions.
Pros and Cons of QuickBooks Self-Employed
There are several pros and cons to using QuickBooks Self-Employed. On the positive side, QuickBooks Self-Employed makes it easy to track mileage and expenses using the mobile app. You can also separate business from personal expenses, which is great if you have not opened a business checking account. On the negative side, you can’t manage your unpaid bills, and you cannot pay employees through QuickBooks Self-Employed.
Pros of QuickBooks Self-Employed
A few of the advantages of QuickBooks Self-Employed are:
- Mileage & expense tracking: With the QuickBooks Self-Employed app, you can upload receipts on the go and keep track of your mileage while you’re on the road. This means you no longer will have to carry around an envelope with receipts, log your miles in a notebook, and remember to record everything in your accounting system later.
- Business & personal finances in one place: When you use QuickBooks Self-Employed, you can keep track of both your personal and business income and expenses in one place, which is essential for sole proprietors.
- Transfer tax information: With the purchase of the Tax Bundle, QuickBooks Self-Employed allows the transfer of schedule C information into TurboTax to simplify tax filing.
Cons of QuickBooks Self-Employed
A few of the disadvantages of QuickBooks Self-Employed are:
- No tracking of unpaid bills: You can’t track incoming bills and print a list of when they are due.
- No payroll add-on: You can’t track payroll expenses, pay payroll taxes, or file payroll tax returns.
- No balance sheet: QuickBooks Self-Employed is not a double-entry accounting system, which means it only tracks income and expenses, not assets and liabilities. You won’t be able to print a balance sheet if your bank requests one.
QuickBooks Self-Employed Reviews
QuickBooks Self-Employed customers like how user-friendly the program is, and they also like the automatic mileage tracker app. On the negative side, customers don’t like that it is missing some of the features you would expect in an accounting software product like the ability to create recurring transactions and track accounts payable. For more information, visit our QuickBooks Self-Employed reviews page.
Alternative to QuickBooks Self-Employed: QuickBooks Online
QuickBooks Online functions similarly to QuickBooks Self-Employed but has increased functionality designed for partnership, corporations, or self-employed people with employees. In addition to having a payroll add-on, QuickBooks Online is a double-entry accounting system that can produce any of the required financial statements for corporations, partnerships, and LLCs.
QuickBooks Online comes in four versions and ranges at prices from $25 to $150 per month. Most users upgrading from QuickBooks Self-Employed will want QuickBooks Essentials at $40 per month.
QuickBooks Online allows some things that QuickBooks Self-Employed does not, including:
- Managing unpaid bills (Essentials plan or higher).
- Double-entry accounting resulting in a balance sheet report.
- A Payroll add-on.
- The ability to track sales tax.
- Managing contractors and preparing Form 1099.
Many Schedule C businesses will outgrow QuickBooks Self-Employed. You should upgrade to QuickBooks Online when you become a partnership or corporation, or when you need to utilize the additional features outlined above.
Frequently Asked Questions (FAQs) About QuickBooks Self-Employed
We have included the most commonly asked questions about QuickBooks Self-Employed in this section.
Is QuickBooks good for self-employed workers?
QuickBooks Self-Employed was made for self-employed people like freelancers and Uber or Lyft drivers. It allows you to keep track of personal and business expenses, plus it calculates your estimated quarterly taxes. Additionally, with the QuickBooks Self-Employed mobile app, you can track your business mileage easily.
How much does QuickBooks Self-Employed cost?
QuickBooks Self-Employed is free for the first 30 days. After 30 days, you will need to sign up for a paid account, which costs $15 per month. If you also want to prepare your own tax return, the Tax Bundle costs an extra $10 per month.
What’s the difference between QuickBooks Self-Employed & QuickBooks Online?
There are several differences between QuickBooks Self-Employed and QuickBooks Online. QuickBooks Self-Employed is ideal for sole proprietors and small business owners who want to keep track of both personal and business expenses. QuickBooks Online is ideal if you are a partnership, S corporation, or C corporation that needs to pay employees, track inventory, and track payments to 1099 contractors.
How do I upgrade from QuickBooks Self-Employed to QuickBooks Online?
To upgrade from QuickBooks Self-Employed to QuickBooks Online, you will need to export the data out of QuickBooks Self-Employed and import it into QuickBooks Online manually. You can contact the Intuit Support team for free assistance with this process.
If you are a freelancer or solopreneur with no employees or contractors, QuickBooks Self-Employed was made for you. You can sign up for the standard version, and then upgrade to the TurboTax bundle whenever you’re ready.
If you are ready to ditch that Excel spreadsheet and get your income and expenses organized, sign up for a 30-day, risk-free trial of QuickBooks Self-Employed and check it out for yourself.