 QuickBooks Online 2023. Car, truck, auto, expense, tracking for taxes. Get ready to earn the skills needed to boost your bank books on up with QuickBooks Online 2023. 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 on down below. We're gonna duplicate some tabs to put our major financial statement reports in by right-clicking the tab up top to duplicate it. Right-clicking the tab up top again to duplicate it. Back to the tab to the middle as the one to the right is thinking reports on the left. The favorite report we're gonna open, which is of course the balance sheet report. Tab into the right as the one to the left is thinking, opening up the reports again this time, the P, the L, the profit and loss, the income statement, closing the hamburger and let's change that range from 010123 to 123123. Running it, I'm gonna tab to the left, close up the hamburger and run this one for the same range, 010123 to 123123. Let's run that one. That's the setup process we do every time. If you don't have information in your reports, that's okay. We're just using this as an example of the standard reports, balance sheet and the income statement when thinking about taxes. We know that the income statement for support, accounting, instruction by clicking the link below, giving you a free month membership to all of the content on our website, broken out by category, further broken out by course, each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. Full proprietorship is the one that we're gonna need for sure. It's nice to have the balance sheet too because if nothing else, the QuickBooks system will force us to have a double entry accounting system which helps us to double check on errors and things like that. So we're gonna go back to the first tab. We've been talking about tracking miles and using the QuickBooks mileage tracker which if you're in the accountant view is under mileage on the left hand side. Here's the intro screen. I'm gonna skip into this screen which is the tracking of the miles and we noted that for the most part the mileage tracking is gonna give you the information here and possibly not affect your actual financial statements. So we wanna think about how you might deal with tracking your auto expenses as you are going because you will have actual expenses and then how you might adjust for that or account for the mileage to make the adjustment for your taxes at your end either yourself or with the help of a tax professional at that point in time. So we talked a little bit about in prior presentations about being able to deduct mileage for a sole proprietor or auto expenses which you can use the actual method or the mileage method. Clearly when you're doing your bookkeeping system what's gonna happen is many people they're gonna have their bank feeds on and they're going to be seeing expenses go through the bank feeds and when they have expenses related to an automobile it's gonna have to go to some auto expenses. So we're gonna clearly be tracking on an actual deduction basis, the actual costs as we're doing our bookkeeping. So then the question is, well how am I gonna group my auto expenses so it's easy for me to see what the actual expenses are and easy to make an adjustment so that we can then choose the mileage method for taxes as opposed to the actual write-off method at your end if that's what we need to do. So the first thing we might wanna look at then is the chart of accounts. So if I go to the accounting down below and take a look at our chart of accounts, now if you just set up your QuickBooks file, QuickBooks will give you like a ton of expense accounts down here and they give basically this really huge chart of accounts in an attempt to cover kind of everybody's different situations. So they could have a system down here that already might be okay for your tracking of your automobiles, but oftentimes you might wanna trim up the tracking system. So let's just set up our accounts from scratch so we can get an idea of what we might want to use. So the basic idea here, note when you're setting up your auto expenses is these are kind of like the actual expenses that you would have if you weren't using the mileage method. But these two right here, parking fees and tolls, you may be able to take even if using the mileage method and therefore you might wanna break those out separately so that when you're doing the mileage method, you can still kind of pick up those in addition. This one up here, depreciation is not something we typically do on the bookkeeping side because the tax software often helps us with the calculation of depreciation because it's not a cash-based thing. It's an accrual-based type of calculation. And then some of these other items we may or may not have or want to break out in their own account, garage, gas, obviously, insurance. Insurance is another key one because oftentimes we might wanna put the insurance for auto insurance under like other insurance like liability insurance, for example, as the category. But we probably wanna put the insurance for taxes if it's mainly for our tax accounting under the auto because it'll depend on what method we're using as to whether we can take the insurance because the tax code kinda groups the auto insurance under auto, not with all the other insurance like liability insurance. And then if you have leases, you might have leases and then the licensing oil, you might break out separate from repairs or you might have oil and repairs, you might break out tires separately or you might put these all in the same area. Sometimes it's useful to break out maybe the oil because you can see how much you're paying on that compared to other repairs. All right, so let's set up our accounts then and we'll have some apparent account for auto and truck and then we'll have some of these sub-accounts in here. So I'm gonna go up top and just add our accounts with the parent and sub-accounts. So we're gonna say new and I'm gonna make them expense accounts and I'm just gonna say this is going to be a auto, well, we're gonna save it under just expenses here. And then the tax code I'll say is auto and the account name is gonna be auto expense, we'll say. Auto expense. Expense, can't spell expense, come on. Now note, you might be thinking that this tax form line is gonna help out a lot with the accounting and they might get it down to the point where that does help out a lot, but in my experience at this point in time, this line isn't doing a whole lot to help out with the taxes. We're gonna basically wanna be working off of our income statement oftentimes. So that's what our thought process is gonna be. So I'm gonna have auto expenses. I'll save that here. That of course will be in our general ledger now under the expenses down below. Auto expense right here and then I'm gonna create sub accounts to break out my expenses underneath that. So I'm gonna say new and then we're probably not gonna, I'm gonna say expense and it's gonna be under just the normal expenses. Actually, no way to say it's a sub account now of auto expense, auto expense and then auto's the form. So I'm not gonna include depreciation although we might have that if we're doing the actual method and we possibly would get that from the tax, the tax preparer to calculate it with the tax software. If you had garage rent, maybe you break that out separately. So I'll say garage rent maybe might not be applicable for everybody to have that. And the point is that it's gonna be a sub account of the auto account. So I'll save that. And so now we've got auto auto under the expenses here and the sub account. All right, let's make another one. I'm gonna say new and we'll say it's an expense account. And I'm gonna say it's under the auto expenses and then let's just make one just for gas. So I'm gonna say this is gonna be just gas. And there we have that. So it's gonna show up right here. It gives you a nice little thing down here to show you where it's gonna show. So I won't scroll down there this time. Let's make a new one. And I'm gonna say expenses again. And it's gonna go under auto, auto. And let's make this one insurance. So I might even insurance. And then I'm gonna put auto. I like to put auto next to it because when it pops up, when I start to populate things in actual forms, I don't wanna mix up my insurances from the other insurance even though it's under the subcategory of auto here. So auto insurance, okay. And then I'm gonna have a new one. And let's say we have an expense and let's put it under auto again, auto. Now we might break out the license in a separate area so we could break out licenses and okay. And then I'll break that one out and say okay. And then the oil. So I'm gonna say new expense, expense, auto. And you might not have all of these categories. The main thing I wanna break out is the parking fees and tools which I might be able to have an expense even if using the mileage method. So I'm gonna say the account here. Oil, which you might group with repairs and tires but I'll break out the oil separately because we might wanna break out oil versus other types of repairs. And then let's do repairs, boom, expenses. And let's say that we do auto and we do repairs. And then, so big list of auto expenses here. And then I'm not gonna do a tires one. I'll just do one for the parking fees. Now this is the big one here. I'm gonna say this is auto. And then this one is gonna be parking fees and tools. And we might wanna note here deductible when deductible with mileage method. I'll even put that in the account because this is the one that we may still be able to deduct even if using the mileage method. So I'm gonna say okay. So then if I scroll down and look at these then as our expenses come through, we're gonna put them into the proper accounts here but most of these, if we're using a mileage method aren't gonna be deductible whereas this one is the key one where we still might be able to deduct that even if using the mileage method. That's gonna be the point. So I'm gonna try to break that one out for sure. All these other ones, if you wanna group them together under just auto expenses then you might wanna do that depends on how much detail you want. But again, you might wanna break that one out separately so that you can make sure to pick up those ones for taxes even if using the mileage method. So now when expenses actually come through we're probably gonna see them on the bank feeds up top so we'll probably, if we have our bank feeds turned on which would be the simplest method we would see them coming through the bank feeds and we would have to assign them of course to an expense account using the actual method and then we'll talk about how we can basically adjust the actual method with the help and use of the mileage information for our tax information. So let's first, I'm gonna mirror the bank feed information coming through by just entering expense form. So let's imagine these are coming through on the bank feeds but I'll just enter an expense form for the normal kind of expenses we might have. And so let's say we had the gas station, generic gas station that we're paying and I'm gonna set that up as a vendor and we're gonna say that happens on 516. Let's say, let's say 01523 let's say and then we're gonna put this into the auto expense and so let's say, let's do it this way this is gonna be auto and we'll go there. So auto, let's say this is just the gas and let's say it was $60 and boom. This is gonna decrease the checking account the other side is gonna go to the gas expense which is a sub-account of the auto. Let's save and new and do a couple of these let's say this is the repair shop for the auto repair shop. I'm gonna add a vendor for that one and say this happened on 126. We had to pay the repair shop and so auto let's say this is gonna go into the repairs and let's say that was for 240 let's say that was a bummer and we'll say save and new and then we're gonna say this is the oil oil auto station, Jiffy Lube or something doing our oil change and we'll say this happened here let's say that was going to the auto for the oil and let's say that that's gonna be let's say that that's gonna be $70 or something and we'll save that save and new let's say we had some insurance so we have auto insurance so say auto insurance company whoever we're paying for auto insurance we'll see that coming through the bank feeds and let's say that that's gonna go into our auto insurance which is now under auto as opposed under the auto category as opposed to other general insurance categories let's say that's a thousand some 200 and we're gonna say save and new and then we also have parking, parking, and tolls or something, parking, tab, adding that that's our vendor parking vendor it's a weird vendor name but the point is I'm gonna put that under here which is the parking and tolls the one that could still be deductible even if we're using the mileage method and let's say that just put a fairly significant number in here so we can see it popping up and save and close this time and the impact on our financial statements would be a decrease in the checking account as these things come through checking account goes down as it goes to the bank feeds and we would of course be recording the other side to an expense form and we've got our auto expense and the sub accounts for the auto expense we may not need all these sub accounts but the one we might want to break out is gonna be this one here because at the end of the year we're gonna have to do some kind of adjustment possibly we have to determine if we're gonna use these in alignment with our actual expenses adding to it possibly depreciation which would usually be calculated by the tax software and or tax professional or are we gonna use the mileage method in which case we need to basically replace those items with the information we might be tracking over here with the mileage rate tracking so once we have that information we have to think about well how am I gonna adjust this? We might be able to do it within QuickBooks we might look at a couple methods to do that we could use like class tracking for example but even if we don't make an adjustment here the point is you wanna make sure that you're breaking this out properly with the insurance for example and the tolls so that if you just give this to a tax preparer or you do your own taxes at the end of the year and you determine that you need to use the mileage method then you can give them that added information and they're gonna have to do an adjustment to take one or the other right? Mileage method or the actual method if using the mileage method you might still be able to pick up like for example the parking fees and tolls as we saw in the prior presentation so we'll get into some methods that you might be able to track that internally to see the breakout using QuickBooks in future presentations.