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DaveC23
July 30, 2020
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Profit allocation for partnerships

  • July 30, 2020
  • 1 reply
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I currently use QB Self Employed for my sole trader business. Now starting a separate business as a partnership, 50/50 with two of us. My questions are as follows; 

 

1. Which QB online subscription handles profit allocation for partnerships? 

2. How do I ensure that only our drawings are reported as (taxable) and any money left in the business at year end is not all taxed? the reason I ask this is that in the first year, the other partner is unlikely to hit the threshold to pay any tax, so I need to know how to allocate this properly in the software. 

 

Apologies, I am not sure even I understand my own question 2. 

Best answer by Jen_D

Thanks for your interest with our products and congratulations on your business upgrade, @DaveC23,

 

All QBO versions such as, Simple Start, Essentials, and Plus are designed for different business types. These services can track a partner's disbursements and profit allocation. All you need to do is create a supplier profile for each partner and a separate equity account for them.

 

The steps to do that is listed in this Community guide: Add an owner or partner to your books

 

Regarding your second question, there are several reports in QuickBooks where you can track a partner's threshold for estimated tax payments and self-employment taxes. To get an immersive experience before purchasing, you can sign up for a free trial with us. This way you have an overview on which program you want to get.

 

Check out this link for our QBO feature comparison and free trials: QuickBooks Online United Kingdom Plans and Pricing

 

I'm also adding a few related articles to help you configure QuickBooks for a Partnership business:

Feel free to ask me if you have other questions about this topic or need other help with setting up your account. I'll be right here to help you. Have a wonderful day!

1 reply

Jen_D
Jen_DAnswer
July 30, 2020

Thanks for your interest with our products and congratulations on your business upgrade, @DaveC23,

 

All QBO versions such as, Simple Start, Essentials, and Plus are designed for different business types. These services can track a partner's disbursements and profit allocation. All you need to do is create a supplier profile for each partner and a separate equity account for them.

 

The steps to do that is listed in this Community guide: Add an owner or partner to your books

 

Regarding your second question, there are several reports in QuickBooks where you can track a partner's threshold for estimated tax payments and self-employment taxes. To get an immersive experience before purchasing, you can sign up for a free trial with us. This way you have an overview on which program you want to get.

 

Check out this link for our QBO feature comparison and free trials: QuickBooks Online United Kingdom Plans and Pricing

 

I'm also adding a few related articles to help you configure QuickBooks for a Partnership business:

Feel free to ask me if you have other questions about this topic or need other help with setting up your account. I'll be right here to help you. Have a wonderful day!

    D
    DaveC23Author
    July 31, 2020

    Thanks Jen, this is super helpful and really explains it well. 

    One more question, apart from QBSE, do all levels (Simple Start, Essentials, Plus) offer this feature to add equity accounts etc.? 

    Many thanks, Dave

    G
    GeorgiaC
    July 31, 2020

    Hi Dave, 

     

    Thanks for getting back to us. Yes, the chart of accounts in all of the QBO versions mentioned are completely customisable, so you can add as many equity accounts as you need 😊

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