 Here we are in our QuickBooks Online test company file using the account view as opposed to the business view. You can toggle between the two views by going to the cog up top and switching the view down below. We're going to duplicate some tabs to put our major reports in them. The financial statement reports, the balance sheet and the income statement. To do so, right-click in the tab up top and we're going to duplicate it as that is thinking. I'm just going to right-click on it again and duplicate it as the new tab is thinking. I'm going to go back to the middle tab. We duplicated reports on the left-hand side and open up the balance sheet. One of the favorites. These are like the default favorite reports because of course they are the financial statements. Let's tab to the right down to the reports on the left-hand side. This time the other one that's there, the profit and loss, the income statement, the P and the L. We're going to close up the hamburger up top. I'm going to scroll up and change the range for the year of 010123 tab 123123. That's January to December 2023. Run it to refresh it and then we're going to tab to the left. Do the same thing. Closing up the ham, burger and change the range to the same 010123 tab 123123 January to December 2023. Run it. Support accounting instruction by clicking the link below giving you a and there's our major financial statement reports so our general concept will be we will do the data input on the left and then populate see how that populates and adjusts our major financial statement reports on the right. We now want to think about the home office expense or deduction for the federal income taxes in the United States. Our goal being to put our financial statements together have a bookkeeping system which will help us out for tax preparation as easily and efficiently as possible at the end of the year. Now, normally with our bookkeeping system for a small sole proprietor type of business that's going to be reporting their taxes with the help and use of the schedule C. We might be able to enter a lot of transactions with the use of the bank feeds. We might have our bank feeds connected in essence on a cash based system for many of the transactions and as the transactions clear our bank feeds coming in from our bank increases decreases to the checking account. We're assigning them to a category or an account constructing our financial statements balance sheet and income statement as we add this data into the system. However, and that's great because we can we can basically build the main report that we need for taxes for sole proprietor, which is the profit and loss using a system like that oftentimes, although there are a lot of instances where we could have a more complex kind of accounting system. We talked about bank feeds in general in a prior course or section. But now we want to focus in on the complexities just with the tax code. We talked about in prior presentations, one of the complexities that almost always comes up with small businesses, which is the use of the automobile, because if you with the automobile use, you might be able to use a mileage method or the direct write off method. And obviously when we are recording the taxes, we are recording the actual expenses as they clear the bank when we pay the gas station. We are then recording it as an expense. But if we use the mileage method, we can't take both the actual and the mileage method, so we need a tax adjustment that that has to happen. As we do the tax adjustment, we would also like to have a nice little reconciliation showing us what the bookkeeping number is, and what the tax adjustment was to get to the tax adjustment which should tie out to the net income or bottom line of the schedule C. We have a similar kind of issue with a home office situation, although slightly different with a home office, you've got some expenses oftentimes which you can't easily break out on a payment by payment system between the business portion and the personal portion. So you typically have to have this adjusting process or as you enter the expense, you might be able to break them out as you do the data input. So those are the two methods we'll kind of look at. What are these kind of expenses? Well typically if you are a renter, that's going to be the rent you pay for your home because if you have a home office in your home, you would think it would be reasonable then to be able to deduct part of the rent that is related to your home office. But obviously when you pay the rent, you're not paying two separate checks. One for the home office, one for the rest of your house, you're paying one check so as that money goes through your bank feeds, then you're only going to allocate it to one account typically. You could try to break it out by the way between two accounts or you could use class tracking. So that's one of the methods as you do the data input that we'll look at but we'll talk about that in a second. And then if you own the home, then you're going to have no rent but you do have to pay the mortgage interest so you're not talking about the full mortgage payment because part of that's financed that's the loan but the interest represents the kind of rent of the purchasing power of the money. So you would think that part of the mortgage interest might be deductible and you're going to have property taxes so you think the amount related to the home office might be deductible there and that gets even a little bit more confusing because you might be able to