Intuit’s QuickBooks Self-Employed Review
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Just because you have a side hustle, or even a small business, doesn’t mean you’re also an expert at running the numbers. Of the numerous options for accounting and tax preparation software available, one solid option is Intuit’s online accounting service, QuickBooks Self-Employed, which is perfect for small-scale businesses or freelancers. It’s offered as a subscription service at two levels: basic and Self-Employed Tax Bundle.
With QBSE, your bookkeeping work can be done from your smartphone using the app. Expenses are tracked by connecting your bank accounts and it also has a mileage tracker feature that uses your phone’s GPS. You can also use it to take photos of store receipts and invoices.
Who can use QuickBooks Self-Employed
Intuit says that its QBSE subscribers average $4,340 in potential tax savings per year. So who are those subscribers?
QBSE is not meant to be a one-size-fits-all solution for all small businesses. It’s designed for freelancers, independent contractors, small-scale entrepreneurs, sole proprietors, single-person LLCs, side-hustlers and denizens of the gig economy.
“If you’re just starting and there’s a lot of fuzziness between your personal finances and your business expenses, that’s the point where QuickBooks Self-Employed would work for you,” said Kate Porter, principal at Pendragon Accounting and a certified QuickBooks ProAdvisor.
“Many people assume QuickBooks will be complicated,” said Alaia Williams, a business systems strategist, who frequently recommends QBSE to clients who are solopreneurs and freelancers. But that’s not always the case.
“It gives them exactly what they need and it’s easy to set up. And I definitely recommend it to clients who haven’t had a financial system like this before,” she said.
How to get started with QuickBooks Self-Employed
QuickBooks is running an introductory deal at both levels. QuickBooks Self-Employed is normally $10 per month, but is being offered at $5 per month for the first three months.
Here’s what you get with a basic subscription:
- Option to separate business expenses from personal expenses
- Automatic mileage tracking
- Invoices on the go
- Maximize your Schedule C deductions
- Automatic calculations of estimated quarterly taxes
The Self-Employed Tax Bundle is normally $17 per month, but the first three months are offered at $12 per month.
Here’s what you get with a QuickBooks Tax Bundle subscription:
- Separate business expenses from personal expenses
- Automatic mileage tracking
- Send invoices on the go
- Maximize your Schedule C deductions
- Automatically calculates estimated quarterly taxes
- Pay estimated taxes online
- File federal and state taxes with TurboTax
QuickBooks Self Employed: Pros
QBSE has a lot of great perks that solopreneurs and freelancers alike will enjoy. Here’s some of the most notable pros:
- Support. QuickBooks has been around for decades and has a huge team keeping it up to date. “If you need something plug-and-play with enormous support, QuickBooks is absolutely the way to go,” Porter said.
- Mileage tracking is an unusual and useful feature, which isn’t found in many other programs.
- Flexibility. Porter loves the flexibility of QBSE, saying you can customize QBSE to fit your business’s particular needs. For example, you can add your own categories for expenses.
- The apps. “People really like that it has a really good app system, better than any other I know in terms of putting it on your phone and having it all the time,” Porter said. So if you’re running a very small-scale venture, having it right there on your phone to quickly scan a receipt or receive a payment makes it so much easier when you’re the only person who has to do that, while also running your business.
- Integration with other apps. QBSE also has a lot of app integration to fill in the gaps for functions it doesn’t provide. Expensify is one that subscribers use to track and categorize business expenses.
- Reports. The reports are great at showing your profits, income and spending, Williams said.
- Integration with TurboTax, is “a huge time saver for those of us who do our own taxes,” Williams said. You can also easily transfer Schedule C income and expenses.
QuickBooks Self Employed: Cons
The software isn’t perfect and isn’t a one-size-fits-all solution.
According to Porter, Intuit makes really specialized software and is still very much geared toward professional accountants. “If you weren’t trained in it you might find yourself a little stymied by some of the functions.” One area she sees this happening is with tax preparation.
“It doesn’t have a lot of advice or hand-holding in terms of what’s deductible and what isn’t, or how to set up your finances to be ready for tax season.”
If you don’t have a trained adviser, she recommends using books that list deductions for small businesses. “Just make sure it’s updated yearly to accommodate new tax laws, especially for 2018, when a lot of it changed. If you have one from 2017, you are already way out of date.”
Williams pointed out that QBSE is completely separate from the rest of the QuickBooks universe, which some users may not like.
“For example, if you want to upgrade from Simple Start to Essentials, it’s no problem. But as of now, you can’t move from QBSE to another QuickBooks Online product (and keep the same company file). When that day comes for me, my workaround will be to end that particular year with QBSE and start fresh the following year with QBO. To me, this is really simple and not an issue, but I can see how it might frustrate some users.”
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Best alternatives to QuickBooks Self-Employed
There are other choices for small business accounting, and many are more scalable than QBSE for growing businesses (offering several subscription tiers). Here are some other top software options to consider:
Wave. Wave is a free, ad-supported service offering invoicing, accounting and receipt scanning that Porter said is a really good option for small enterprises who are just starting out and don’t want to spend a lot of money. It consists of two apps for scanning invoices and receipts, but not much else. However, as business grows, you can import data over to QBSE pretty easily. Paid services include payment processing and payroll.
QuickBooks Online. There are three versions available for QuickBooks Online Small Business: Simple Start, Essentials and Plus (regularly priced at $20, $35, and $60 per month, respectively). This may be a better option for small businesses, and less geared toward the freelance contractor. It is currently offering 50 percent off its plans, so if you hurry, you can save money, too.
GoDaddy. GoDaddy offers three levels of online accounting: Get Paid, Essentials and Premium (currently priced at $3.99, $7.99, and $11.99 per month, respectively). GoDaddy Online Bookkeeping imports user data from different platforms such as Amazon, eBay, Etsy, and PayPal for income and expense reports. All levels let users manage finances without accounting knowledge, accept credit and debit payments on a smartphone, automatically create and send invoices and view business reports.
Zoho Books. Zoho’s accounting service is called Zoho Books, and also offers three packages: Basic, Standard and Professional (regularly priced at $9, $19 and $29 per month, respectively). Zoho Books users can also purchase optional bundles like one for a subscription business. There are fees for add-ons, such as additional users, snail mailings and auto-scans.
Xero. Xero is another popular service that offers cloud-based accounting services to small- and medium-sized businesses. Xero has three service tiers: Starter, Standard and Premium (regularly priced at $9, $30 and $70 per month, respectively). Like QuickBooks, it offers a professional adviser directory, a mobile app, invoicing and integration with many relevant apps. You can also manage inventory and payroll (although it will no longer be offered in the U.S. after Dec. 31, 2018) and streamline your expenses for easy bill-paying.
FreshBooks. This bookkeeping software has more functions than QBSE, but that comes at a higher cost. FreshBooks has three plan options: Lite, Plus and Premium (regularly priced at $15, $25 and $50, respectively). Some of the great features worth paying more for include the ability to automatically charge clients, accepting deposits, tracking time and expenses, recurring invoices, late payment reminders and alerts letting you know an invoice has been viewed.
Fees accuate as of date of publish.
The bottom line
QuickBooks Self Employed is a great software program to consider if you’re just starting out or strictly work freelance and contract jobs. However, it’s important to also consider how you expect your business or side hustle to evolve and whether or not your accounting software will allow for a seamless upgrade or integration.