Why You Shouldn't Put W-2 Income in QuickBooks
QuickBooks and other software platforms can serve as amazing tools for your business. The important thing to remember is they are built for business. Many of my clients see how useful a program like QuickBooks is and they add in all of their personal bank accounts and W-2 income in to be tracked.
Here is why this is not a good idea:
When you add income you earned from a job as an employee (W-2), that is money that has already been taxed. It has already gone through the "tax filter." If you also ad it in with your income in QuickBooks, it will be added back to your business profit, and get taxed again!
There is no need to pay more than you need to in taxes. That is why it is important to recognize when income should be tracked under a business or personally. If you are looking for personal spending tools and apps, Intuit (the company that makes QuickBooks) also offers a product called Mint, and it's FREE! Mint helps categorize personal spending and creates budgets so you can track your own finances beyond the business. You may also use a simple spreadsheet or other log for these.
Each channel of income (W-2 income, business income, unemployment, etc) should be tracked separately so that you can report all of this accurately come tax time and be prepared to save money in taxes.