QuickBooks Self-Employed ($10 per month) is Intuit's first iPhone app designed for freelancers and independent contractors who want to manage their income and expense information by downloading bank transactions. The app also tracks mileage and calculates quarterly estimated income taxes. QuickBooks Self-Employed handles all of those tasks capably, and its simplicity and usability make it easy to learn and use. In fact, QuickBooks Self-Employed is a few steps ahead of its closest competitor, Xero TaxTouch ($5.99 per month), as it takes photos of receipts and records mileage in real-time using the iPhone's Location Services. Alas, QuickBooks Self-Employed lacks some features offered by Editors' Choice, GoDaddy Bookkeeping Essentials ($7.99 per month), such as time-tracking, bank card payments, and invoicing.
Excellent User Experience
Like other Intuit products, QuickBooks Self-Employed is a pleasure to use, thanks to an appealing interface and simple navigation tools. Four icons at the bottom of the screen take you to the app's primary functions: Home, Transactions, Miles, and Taxes. Clicking the gear icon opens the Settings page, which is where you'll do the required setup.
Like Xero TaxTouch, getting started with QuickBooks Self-Employed only involves a few steps, and they're all found on the Settings screen. You'll need to enter your login credentials for your your online bank and credit card accounts (if you're not yet doing online banking, just go to your bank's website and create a user name and password for access). After transactions are cleared by your bank, they automatically download into QuickBooks Self-Employed in batches, once a day, and appear in a list there. Fortunately, the app lets you manually enter transactions, which you'll need to do sometimes even if you're getting downloaded transactions. Neither Harvest Solo or IQBoxy Prime lets you set up a link to your bank accounts.
In order for the app to calculate your estimated taxes, it needs to know a few things about your personal tax situation, like your filing status, number of dependents, and any additional W-2 income. You'll also need to indicate whether you'd like to receive push notifications and whether you want receipt photos to be saved to your phone's camera roll. You can create a PIN for the app if you'd like that extra degree of security.
Here and elsewhere in QuickBooks Self-Employed, you'll use familiar iPhone conventions to move around and enter information. For example, Yes/No options can be toggled on and off by clicking on standard iPhone setting buttons. When you select an entry in a list (like a transaction), a new screen containing additional or underlying information opens.
The cleanly designed home page won't mean much to you until you've started downloading and entering data. There are two bar graphs, one that displays income and expenses over a user-definable period of time and another that covers monthly business mileage. No app in this category has a particularly busy home page; they mostly offer graphic representations of money spent and earned.
Getting to Work
Once you've downloaded your first batch of transactions, you'll click the Transactions icon to open the list. Each entry displays the payee or payer, the date and account, and the amount. When you click an entry, a more detailed screen opens. Here, you can earmark it as Business, Personal, or Split (divided between the first two options). If it is a business expense, QuickBooks Self-Employed may have already assigned it a category, which is something that all of these apps do. You can alter this, if you so choose. Note: It's very important that your business transactions are classified properly. The list of categories in QuickBooks Self-Employed matches those found on the actual IRS Schedule C that you use when preparing your income taxes.
The transaction detail screen contains other useful options. You can attach a receipt by taking a photo directly from the app (a feature that Xero TaxTouch lacks), accessing your phone's photo library, or importing it from Google Drive. You can add notes and click the Exclude Transaction icon, too.
Clicking Create Rule lets you specify that you want transactions originating in one or all accounts from a particular payer or payee to be classified the same way every time. So, for example, everything you order at Caribou Coffee using your Citibank credit card should be classified as Personal. If you take a client out, you'll be able to change the designation to Meals & Entertainment. You can create a rule anytime by clicking the gear icon in the upper left and selecting Create Rule. It's quite useful. Xero TaxTouch offers a similar tool.
You can also assign or edit categories in the list view by swiping to the left for Business and to the right for Personal, much like Xero TaxTouch.
Your Estimated Estimates
If you're going to take a trip that you know will be deductible, click the Miles icon. There are two ways to record a trip. You can enter the total miles and trip purpose, or activate settings in the iPhone (Location Services, Background App Refresh) that let you track mileage. The app helps you initiate this process with reminders, but it's still easy to forget to turn on one of the required settings. I did, twice.
All of this work you've done recording income and expenses and mileage culminates in a real-time, constantly refreshed estimated-tax calculation. To see this, click the Taxes icon. The app displays the IRS Schedule C categories. You can toggle between two figures for each: Spending Amount (the dollars you actually spent) and Deduction Amount (your IRS-allowable deduction).
The number at the top of the screen represents total deductions to date. Click Quarterly Taxes to see what your estimated taxes should be for each quarter, as well as the amount you've paid on them. Since it's currently the middle of 2016 at the time of this writing, two due dates have already passed. QuickBooks Self-Employed uses the income and expenses you've already entered to extrapolate an estimated tax projection for the remaining two quarters. These numbers will, of course, change as you continue to enter real numbers, and they'll only be final after you've entered all of the data for each three-month period.
Preparing to Prepare
I reviewed the basic version of QuickBooks Self-Employed, but Intuit sells another version. QuickBooks Self-Employed Tax Bundle ($17 per month) adds the ability to pay quarterly estimated taxes online. You can also export your Schedule C data directly to TurboTax and prepare and file one federal and one state return.
In the version I tested, you can export your Schedule C information out of the app by clicking the gear icon in the upper left and choosing Reports. There are four reports here that can be emailed to you in .PDF format: Mileage Log, Profit and Loss Statement, Tax Summary, and Tax Details. Xero TaxTouch emails you a .JPEG file containing your Schedule C category totals with their corresponding IRS Schedule C line numbers, and GoDaddy Bookkeeping Essentials sends you to its website for your estimated tax numbers. Harvest Solo and IQBoxy Prime don't offer this feature at all.
Dollars and Cents
QuickBooks Self-Employed lacks some features found in our top choice, GoDaddy Bookkeeping, including the ability to invoice and to accept payments from customers. That said, QuickBooks Self-Employed's automatic mileage tracker is unique in this group. Its user experience is exceptional, as is its handling of expense transactions and estimated tax calculations. QuickBooks Self-Employed isn't perfect, but it's an iPhone financial app that's well worth considering.