QuickBooks Self-Employed is designed to help freelancers and sole proprietors keep tabs on income, expenses and tax obligations. Simply swipe left to mark a transaction as business versus personal and categorize it to align with IRS filing categories.
The web and app-based service works well for people with side hustles or those just starting down the self-employment track, but it won’t scale with your business and switching services could prove a hassle. Skip the self-employed version and go straight to QuickBooks Online if you think you’ll outgrow QuickBook Self-Employed’s basic reports and features.
Starting at $15 per month. Receive 50% off for the first three months.
Maximum number of users
Maximum number of financial accounts
Easy sharing with accountants?
Yes; you can send email invites to your accountant.
Easy to scale?
No. You will need to switch services as your business grows. You can upgrade to QuickBooks Online but may need to manually move your data.
Easy to use?
Yes; once you get the hang of setting rules to automate expense tracking.
How does QuickBooks Self-Employed work?
QuickBooks Self-Employed is designed for freelancers and contractors, specifically those who don’t have separate business and personal accounts. You may not find value in the service if you use a dedicated business credit card or checking account. But if you're mixing business and pleasure, financially speaking, you’ll appreciate intuitive tools to help you track, sort and categorize transactions.
Once you connect your accounts (checking, credit cards, PayPal, etc.), you can easily see all of your income and expenses in one place. You’ll need to invest some time in organizing those transactions, though, at least at the onset. You can do this one of two ways: Manually assign income and expenses as business or personal and categorize them, or create rules to automate the process.
Beyond tracking and categorizing expenses, you can log mileage and calculate relevant deductions. You can also create, send and track invoices via QuickBooks Self-Employed, though the service allows minimal customization and doesn't support estimates. QuickBooks Self-Employed can also produce the following business reports:
Profit and loss.
As of this writing, you can get 50% off any QuickBooks Self-Employed subscription for the first three months.
QuickBooks Self-Employed benefits
Swipe left for business
Using the QuickBooks Self-Employed app, quickly mark income and expenses as business or personal with the swipe of your finger. You also can split transactions by percentage or dollar amount, designating a portion as business versus personal.
Had enough with swiping? Set rules to automatically assign and categorize transactions. You can tell QuickBooks that deposits from a specific client should always be marked business income, for example. Or that transactions at Staples should always be designated as business office expenses. Rules can be applied retroactively. You can also mark a specific bank account as “mostly business” to take some of the legwork out of organizing your books.
Set it and forget it mileage deductions
No need to manually calculate mileage deductions for every work-related trip. QuickBooks Self-Employed will automatically do the math for you using the current IRS mileage rate. Just opt into mileage tracking via the app to automatically log all of your car travel, then mark which trips were business related. QuickBooks keeps a running tally of business miles and the corresponding deduction. You can also manually enter trips using the app or web service.
Some users report issues with missed trips and inaccurate mileage tracking, so keep tabs on your trip log to ensure precise records. You may need to fine-tune your settings to lock down your automatic mileage tracking.
Categorize expenses, simplify taxes
QuickBooks Self-Employed lets you classify incomes and expenses using categories that align with the IRS Schedule C (Form 1040), such as advertising, commissions and fees, legal fees and utilities. Using this feature to properly categorize expenses in advance takes some of the stress and guesswork out of filing your taxes.
QuickBooks Self-Employed drawbacks
Doesn’t accommodate multiple businesses
Entrepreneurs with more than one company need to create (and pay for) a separate QuickBooks Self-Employed account for each business. This is true with QuickBooks Online, as well, but with that version you can use a single login and toggle between your businesses. QuickBooks Self-Employed doesn't have that feature. Instead, you have to maintain separate emails and login info. When you want to switch between accounts you need to log out of one account, then log in to the other.
Difficult to scale
QuickBooks Self-Employed doesn’t have multiple tiers that you can grow into. Instead, when you outgrow the service you need to switch solutions. Doing so can be complicated even if you stay within the QuickBooks universe. You may need to manually move your data by exporting, then importing data into your new QuickBooks account. Mileage data can’t be imported into a new QuickBooks account, so you would need to manually add each trip.
Note: You can’t revert back to QuickBooks Self-Employed if you make the move to QuickBooks Online.
QuickBooks Online: Robust features, scaleable plans
QuickBooks Online offers a more scalable, albeit more expensive, option to QuickBooks Self-Employed. The Online option starts at $25 per month for essentially the same features as the self-employed version, but as your business grows you can seamlessly upgrade to the Essentials plan ($50 per month), which lets you add users, create more robust reports and connect with other business apps. Because you’re staying within the same product, you won’t need to manually move data when it's time to upgrade.
Wave: Free service, custom invoices
Wave is a free alternative to QuickBooks Self-Employed that offers unlimited invoices and estimates that can be customized with your logo and company colors. Mileage tracking isn’t available with Wave, so you’ll need to use a separate tracker like MileIQ or Hurdlr.