Did you know that filing your taxes can be incredibly simple with QuickBooks Online? You might be surprised to learn that your QuickBooks Online file contains almost everything you need to complete your small business taxes. I’ll demonstrate how to get your QuickBooks Online ready for tax season. During this process, you may be received a QuickBooks com error and you can learn QuickBooks easily.
Getting transactions up to date and reconciling
You must have all of your transactions for the year entered in QuickBooks Online before tax season. [bctt tweet] “You need to have all your transactions entered for the year in QBO in order to use it for tax time.”
This step is crucial because your QBO file needs to include all transactions. Not entering all of your expenses could cost you valuable tax deductions.
Read my post on How to do a full year of bookkeeping when you need it done yesterday if you haven’t completed any of your bookkeeping yet. In this article, I’ll walk you through the process of doing your bookkeeping for the first time.
Review transactions entered
A crucial step that you should take after reconciling your bank and credit card accounts in QuickBooks Online is to review account activity to ensure that transactions are properly categorized.
Why should you review transactions in QuickBooks Online?
Even if a transaction has been reconciled and is valid, it may still be assigned to the incorrect account. You might observe that certain transactions were labeled as “uncategorized income” or “uncategorized expenses,” for instance. Transactions might be mistakenly labeled as “computer expenses” when they actually qualify as “internet expenses”. Transactions that are labeled as “legal expenses” but are actually “accounting expenses” may exist. To get useful reports from QuickBooks Online, transactions must be assigned to the appropriate accounts.
The Profit & Loss report and the Balance Sheet must both be reviewed in order to review transactions entered.
Review the Profit & Loss and Balance Sheet reports
From the Reports menu, run the Profit & Loss report for “last year.” Give your numbers a thorough review. Do any figures appear to be unusually high? What figures stand out as unusually low? Exist any significant negative amounts that shouldn’t be present?
Zoom into the transaction details by double-clicking on any amounts that appear to be excessively high, excessively low, or incorrect to check for transactions that may have been entered into the incorrect account. The balance sheet report in the same manner.
Fix mistakes
I’ll cover the most typical errors and how to correct them in upcoming blog posts. The following are typical errors in QuickBooks Online:
- Overlapping transactions
- Transactions accounted for as uncategorized income and expenses
- Mistakenly entered transactions to the wrong account category
- Insufficient funds in the Undeposited Funds account Insufficient funds in the accounts payable and receivable
Invite your tax accountant to QuickBooks Online with your accountant
You are prepared to invite your tax accountant to QuickBooks Online once your bookkeeping has been updated, reconciled, and cleaned up. You can simplify tax season by not giving your accountant any receipts, files, or other paperwork. Your tax professional will use QuickBooks Online to generate the necessary reports. To invite your accountant to QuickBooks Online, follow the instructions in this video.
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