TAX TIP: Use QuickBooks Online to Ease Estimated Tax Nightmares

DID YOU KNOW? Figuring out estimated taxes can be a big PITA if you don’t have a bookkeeping system…and doing your own books can be even more overwhelming….until now!

If you pay estimated tax, and your income fluctuates, you may wish to adjust estimated tax installments you owe throughout the year, say if you’re not earning as much as last year (OR you are earning more).

Most people pay the same estimates four times a year because they don’t use any bookkeeping system, so it’s best for them to avoid penalty by paying in 90% of the prior year tax divided into four installments.

However, you’re allowed an option: pay 90% of your prior year’s tax liability in four quarterly estimates, or pay 100% of your current tax liability. How do you know what your current year liability really is? By calculating estimated tax installments based on actual earnings & expenses for the quarter in which each estimate is due.

How do you do this? Use QuickBooks Online — it’s perfect for people who only do their books a few times per year (or less!), because once connected to your accounts, QuickBooks Online updates bank & credit card activity every night, regardless of when you log-in to QuickBooks Online to accept downloaded transactions, and enter them into your QuickBooks Online registers.

Banks may only allow 12 or 18 months of activity to be downloaded manually from their website but if you have QuickBooks Online connected to your accounts,it will update every night and store this activity in the Banking Transactions tab until you need it.

QuickBooks Online comes offers a free 30 day trial – you can connect QuickBooks Online to your bank and credit card accounts, and QuickBooks Online will automatically download the past 90 days of activity when it is first connected.

But, if you want to do last year’s bookkeeping, it’s really easy to manually import additional bank & credit card transactions. You can import transaction activity into QuickBooks Online as far back your bank allows activity to be downloaded from it’s website. (Wells Fargo, Chase and Citibank allow you to download the past 18 months, for example).

The best thing about QuickBooks Online is once you connect QuickBooks Online with your bank or credit card account(s), the activity will automatically update every night, meaning that if you don’t do your bookkeeping for a whole year, the activity will be waiting in your QuickBooks Online downloaded transactions so you may add it to your registers at any time. Never fuss with getting all your activity downloaded again!

One MAJOR problem with QuickBooks Online — if you aren’t 100% familiar with it, you may make the mistake of assuming things will work a certain way but there are a few flaws in QuickBooks Online that are not obvious right away!

New users tend to make errors which can be time consuming or almost impossible to fix…even for the most seasoned accounting expert, there are a few things you should know about QuickBooks Online, especially before you start accepting downloaded transactions into your registers….for instance, You need to actually click in each transaction and set-up the vendor name in the beginning or your transactions will be entered without any name.

Coming from someone who has been doing accounting for more than 20 years, you probably do not know the proper expense categories to use in the beginning so if you have an expert like me set-it up and do a few months (or years) worth of the bookkeeping for you, it provides a path to you to follow.

I offer a 50 minute remote tutorial to help you get started set up and use QuickBooks Online, where I will assist you to set-up your new file and get you started using it, and answer all of your questions.

I also offer a 20 minute remote support session to answer any QuickBooks question you have, or show you how to use a feature, if you wonder whether you should convert/upgrade/downgrade to a different QuickBooks version or convert your QuickBooks data to a new accounting/ERP system, or to troubleshoot any QuickBooks issues or errors you may possibly have.

Getting started off right is most important for any bookkeeping system.

Let me help you set-up your QuickBooks Online file in the beginning, your bookkeeping will not just be accurate, but you can always turn to me if you have questions later on. Too many times people wait to contact me after trying to do set up QuickBooks online themselves, and it always takes a lot longer to repair errors then to do things correctly from the start.

Learn more about my QuickBooks Desktop (Mac & PC) support & QuickBooks Online support services HERE.