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C
Challin
April 3, 2024
Question

Why QuickBooks automatically categorized the QuickBooks subscription as "Taxes and Licenses" ?

  • April 3, 2024
  • 1 reply
  • 0 views

I am very confused now that I learned that QB automatically categorized the QuickBooks subscrition as "Taxes and Licenses". I was in the knowledge that this expense falls into "Office expenses" or "Other business expenses" since QB Self-employed do not have the category for "Web apps"

1 reply

MariaSoledadG
MariaSoledadG
April 3, 2024

Let me provide some details on this, Challin.

 

In QuickBooks Self-Employed (QBSE) deductible tax and license fees associated with your self-employed job fall under Taxes and Licenses. And that is based on the Schedule C categories. Transactions under this category also include your subscription. 

 

You can always change the category if you feel QuickBooks isn't categorizing the correct one. You can click the current category and search for Other business expense. I've added a screenshot for your reference:

 

Furthermore, learn how to categorize QuickBooks Self-Employed so it matches it to a line on your Schedule C. Also, when categorizing, QBSE will always base the category on the list of the most up-to-date Schedule C even if you're only using the web applications. I've added this article for more details: Schedule C and Expense Categories in QuickBooks Self-Employed.

 

Furthermore,  learn how to download transactions and export them in CSV files. Check out this article for more information: Export Transactions and Get Reports in QuickBooks Self-Employed.

 

If there's anything else that you want us to help with categorizing transactions, please let us know so we can get back to you. Have a great day!

    C
    ChallinAuthor
    April 3, 2024

    Hi Maria, First all thank you very much for your time used in this query. I am wondering why under "Taxes and Licenses" because the subscription to use "QuickBooks" is not a tax and is not a license. This is a Recurring payment for to use a web app software. I am just curious because reviewing QBSE I confirmed it have the follow categories:

    • "Apps/software/webservices"

    and

    • "Memberships/subscriptions",

    to me, either of these two makes more sense than the other one "Taxes and Licenses"

    Actually your post made me read the instructions for line 23 of the Schedule C. where the text refers rather to taxes and licenses related to the government.

     

    one way or the other, I just want to know if there was a good reason for QuickBooks categorized that way. as you mentioned I can change it if I want to. Maria, thank you thank you very much!

     

    Best Regard.

    A
    AileneA
    April 3, 2024

    Hello, Challin.

     

    Thank you for contacting the Community again and expressing your curiosity regarding categorizing the subscription to use QuickBooks under Taxes and Licenses in QuickBooks Self-Employed. Allow me to explain the rationale behind this categorization.
     

    In QuickBooks Self-Employed, the Taxes and Licenses category is a default category encompassing various expenses related to taxes, licenses, permits, and other regulatory obligations. While the subscription to QuickBooks itself may not be a traditional tax or license expense, it is categorized under Taxes and Licenses to provide a general grouping for these recurring payments.
     

    Categorizing the QuickBooks subscription under Taxes and Licenses allows easy tracking and organization of compliance and regulatory obligations expenses. This categorization helps users maintain accurate records and generate comprehensive reports by grouping similar expenses.

     

    The categorization may seem unconventional, given that the QuickBooks subscription is a recurring payment for a web app software. However, it is essential to note that QuickBooks  Self-Employed provides flexibility for users to customize their categories based on their specific needs and preferences. You have the option to change the category to one that better reflects the nature of the expense if you prefer.
     

    Please remember that the categorization in QuickBooks Self-Employed can be adjusted to align with your business's specific requirements. If you feel a different category better suits your needs, you can easily modify the category and assign the QuickBooks subscription expense accordingly. However, I recommend consulting your accountant when adding the transactions to the category. This way, we can ensure that it is added to the correct category and avoid messing up your books.

     

    I hope this explanation clarifies the categorization in QuickBooks Self-Employed. Please don't hesitate to reach out if you have any further questions or need assistance with any other aspect of QuickBooks. We're here to support you. Have a great day!

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