I thought filing quarterly taxes as a freelancer would be a nightmare, but QuickBooks Self-Employed makes the process painless
- I've been freelancing for four years, and I swear by QuickBooks Self-Employed for accounting.
- Not only does it automatically track and categorize my income and expenses, but it offers unique features like auto-tracking for mileage and integration with TurboTax.
- My favorite feature that QuickBooks Self-Employed offers is that it gives you real-time quarterly tax estimates so you never have to worry about coming up short during tax time.
- Get started with QuickBooks Self-Employed today »
If you ask any freelancer what the biggest headache of self-employment is, they're likely to respond with a near-unanimous answer: taxes.
There are tons of accounting tools out there that work for freelancers that try to make tax time a little smoother. Some work better than others.
QuickBooks Self-Employed is my favorite. I've been using it for years and foresee sticking with it for several more, at least until my business gets big enough to require more robust features.
While QuickBooks Self-Employed doesn't offer the most features of any accounting app, it's simple, easy to use, and affordable, which is perfect for where I'm at. Best of all, it makes paying my quarterly estimated taxes a breeze.
How QuickBooks Self-Employed works
I prefer online tools that I can access from anywhere, including my cell phone. Not only is QuickBooks Self-Employed online, but it also offers a mobile app with some really useful features when you're on the go.
I link my bank accounts, both business and personal, and my business credit card to my QuickBooks Self-Employed account so that all of my transactions are automatically uploaded. I can then go through each transaction and categorize it as business, personal, or a split between the two.
This sounds tedious, but like most accounting programs, QuickBooks Self-Employed lets you create rules so that you don't have to go through and categorize every transaction manually.
For example, I have a rule that labels all deposits coming in from my regular clients as "business," so I almost never have to go through and categorize my revenue.
I also have rules set up for regular expenses - for example, expenses at my local grocery store are automatically categorized as "personal," while withdrawals from PayPal that go toward paying my virtual assistant are always categorized as "business."
QuickBooks Self-Employed is the only major accounting app with auto-tracking for your mileage
While other online accounting programs also offer mobile apps, QuickBooks Self-Employed is the only one that comes with auto-tracking for your mileage.
Mileage is one of the most lucrative tax write-offs if you're self-employed; the standard mileage rate for 2020 is 57.5 cents per mile driven for business purposes. If you drive a lot for work, this adds up quickly.
The catch is that you have to meticulously track all of your mileage throughout the year in order to claim a deduction. If you mess up, you could risk having your tax returns audited. That's where the QuickBooks Self-Employed mobile app comes in.
The app has a special feature that allows you to turn on auto-tracking every time you take off for a business-related trip. When I leave the house to go meet with a client, I turn this feature on, and it tracks my trip, reporting my mileage from start to finish. At the end, I categorize it as business, and that mileage is saved.
This means that when it's time to do my taxes, I can easily claim a mileage deduction by looking at my QuickBooks account. It also means that if I'm ever audited, I have proof of my mileage.
You can integrate QuickBooks and TurboTax
I use TurboTax for my taxes, and because QuickBooks and TurboTax are from the same company (Intuit) you can buy a bundle that includes both programs and integrates them.
This means that your income and expenses from QuickBooks Self-Employed can be automatically transferred to TurboTax Self-Employed. You can even pay your estimated taxes online with this bundle, and it comes with one free federal and one free state return filing.
I didn't purchase this bundle because even though I use both TurboTax and QuickBooks, the bundle costs significantly more per month because of the integrations and added features it comes with. My taxes are pretty simple right now, and I'm fine with importing that data manually and paying taxes on my own.
However, I could see this function being useful in the future as my business grows.
My favorite QuickBooks Self-Employed feature is that it estimates my quarterly taxes for me
A lot of self-employed folks I know use FreshBooks because it offers features like double-entry accounting, time tracking, and product and service records as well as team collaboration tools.
This can be helpful for business owners with a team, but as a freelancer with no team, I don't find that I need these features.
What I do need is a program that helps me estimate my quarterly taxes. FreshBooks, and many other major accounting programs, don't offer this - but QuickBooks Self-Employed does.
By tracking both my income and my business expenses, QuickBooks Self-Employed can automatically generate an estimate for how much I'll owe the IRS at the end of each quarter.
It does this in real-time, so I always have a sense of how much money I should stow away in my savings to prepare for tax time. As soon as I log in, my estimated tax bill and due date are shown at the top of my account.
While this is something freelancers can keep track of manually, I like having a program that not only does it for me but reminds me regularly how much I'll owe.
One of the biggest stresses as a freelancer is coming up short during tax season and owing more money than you expected. QuickBooks Self-Employed makes sure that doesn't happen.
Let QuickBooks Self-Employed help you pay your quarterly taxes this year »
- More tax day coverage:
- When are taxes due?
- How to file taxes for 2019
- What is a tax credit?
- H&R Block vs. TurboTax
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