In this presentation, we will discuss the use of sub accounts within our tax deductions tracking method using the classes method within QuickBooks. Here we are on the homepage, we currently have the open windows open. In order to open the open windows, we go to the View drop down and select the open windows list. We're going to go now to our reports for the profit and loss and take a look at what it looks like this time and how we can adjust that that look with the use of sub accounts. So we'll go into the reports drop down Up top company and financial we're looking for the profit and loss by class profit and loss by class. And we're going to change the date range once again from Oh 10119 to 1230 119.

That's January 1 to December 31 2019. The year we are working on and if we scroll down we have our items that are going to be personal items that are tax deductible. We put them into this separate column the tax deductions personal column And if we start each of those types of accounts with the name, personal deduction, and we don't have account numbers as we do here, then by alphabetical order, it will group these all together. So that's kind of nice in and of itself. So we don't really have to then put in some other kind of special area to have sub accounts because it's already kind of listed out just by alphabetical order in that format. However, we may want to we may want to say that I would like to group these together under a sub account.

So that's what we'll do now we'll group these together, we'll make a master account for personal deductions and group these as sub accounts to it. To do that, we're going to go back to our chart of accounts. So we're going to go to the lists drop down, we're going to look at the chart of accounts Chart of Accounts, and we're going to add a new account which is going to be like our master account, the master account, we're going to go to account drop up down at the bottom where drops up rises up, I would say and we're going to say new account new. And it's going to be also an expense type of account. Continue. And we will call that I'm just going to call it personal deduction, personal deductions, that'd be an S, we might want an S there.

And that's where that's what it's gonna be, that's going to be our master account. We're going to set that up and then every other account that we're just going to change it and make them sub accounts of the master account. So we're going to say Save and Close. And then we'll just go into all these sub accounts, and we'll we'll make them subsidiary to the master. So I'm going to right click on this one, and we'll edit the account. And we're just going to make it a subsidiary of the personal deductions, personal deductions account there.

That's what we're going to do and just say, OK, save and close, same process for all of these personal deductions. So we'll right click on the one For a child deduction, edit that account, you cannot double click on it by the way, or else it'll go into a register. And that's not what we want. We're going to make this a sub account of the personal deductions, that website. So if I type in PERS, and then I can scroll down and find that one little bit faster if you want to go a little bit faster. And then here's the personal deductions for the college costs.

Remember those, we're going to edit that account, add the sub account, personal deductions, that's the one we want and save and close again. Then we're going to go down to the IRA, right click on it, we're going to edit that account. And we'll change it to the sub account and we're going to call this personal and we want the personal deductions again, and save and close. Then we're going to go to the medical medication. Right click What is that? Yeah, that's the one I want.

Right click and edit. And we want to make that as some of the personal deductions, that's the one and then we'll go to the medical insurance, right click, edit that account, we're going to make it a sub account of the personals. This is great. And then say Save and Close. We get to do this one last time, and then we have to stop. That's all we got.

We're going to right click on it and go to the Edit account, sub account personal that's the one and Save and Close. Now let's see what it has done to our financial statements by going into the open windows open items and go into the profit and loss by class. We will update and refresh the window as prompted. And there we have it so now we can see that it's it's broken out. And we have this personal deductions and the nice thing about that That, you know, we can now minimize that. And we have less distraction over here.

So for example, if we wanted to just look at the unclassified the business kind of section, we could say, Okay, now we've got this, we can, we can at least zoom into one distracting number, we have one line, that's a distraction instead of that whole big lump of things that were kind of distracting looking. So that's one advantage. And of course, if we were to see it, and just if we want to make a normal profit loss by going to reports up top company and financial and a profit loss, this is a 10119 to 1230 119. We still have that case. So we still have this kind of things that are problem, because it says January through December, by the way, because these are going to be not really business related. So that's why we need to run it by class.

So I can minimize these and at least I can see Okay, that's a lump number that's kind of not really belonging in terms of business expenses on this report, and we can go back to this profit loss. And this is where they really should be. So we'll we'll discuss some different ways that we could format this profit and loss as we have these different types of classes as well. Next thing we want to do Joe, though, just for the sub accounts, you might say, hey, it'd be nice if the sub accounts were like at the bottom, maybe I want them at the bottom. And and then I don't have to see him up there. So so we could do that.

We could go to the profit add to the chart of accounts. And we can go to this personal deductions, right click and edit the personal deductions, edit account. Now one way we could do it is we can use alphabetical order and say that I want to just say I'm going to call this z personal, you know, because Z's at the end So we'll say z, personal deductions, and then say Save and Close. And because there's no other account that starts with z, we should be able to go back to the profit and loss by class, refresh it, and that'll move it down to the bottom. So at least we can say, Okay, here's all the stuff and we moved it down to the bottom. So it not, the other option we could do is actually to put it down in like other income and other or other expenses were at the bottom.

And to do that, we'd have to actually change the account types. So we could try to go back over here and say that I want to right click on this and edit the account and put it not as an expense, but as an other expense. And that'll kind of put it way on the bottom. And if we save and close that, I can't do it until I until I change all the sub accounts. So to do that, let's do that really quickly. I can call This back out.

And I could change all these sub accounts by right clicking Edit. And I'm gonna, I'm gonna unsubsidised it right now, and then change this to other expense. Do that I'm actually gonna delete the whole sub account, and then on sub account and then change it to other expense. So then I'm going to save that. I'm going to do this all the way through, I'm going to go to childcare, right click, we'll edit that one. And then I'm going to delete the sub account first unsub on sub account it and put it in as other expense.

Okay, I'm gonna do this kind of quickly. And then I'm going to right click and edit this one. We're going to delete this on sub account, and then make it an other expense type of account rather than just an expense. And then we'll go to this item, right click Edit Delete, remove the sub account, make it an other Expense Type item. Save and Close and this item right click Edit will make it a delete this item, remove the sub account and then other expense, Save and Close. And then we'll take this item right click Edit.

We'll delete this remove the sub account and other expense Save and Close. And then one more time, right click Edit, will will remove the sub account and then other expense Save and Close. Now before I change the actual master account, if we just go to the profit loss and see what happens here, we can go back in and we can see now that it's listed all into the other expenses at the bottom, which could be nice because then we got ordinary income, and then all the other stuff is broken out by taxable deduction and in the other deductions category in the bottom, even if we don't put it into a sub account, but we may have some other items and other expenses as well like interest expense sometime it's down there. So then we could go back over here and add the sub account by changing the sub account and saying that we want this to be edit.

Now other expenses and other Expense Type to match. So now that's going to be an other Expense Type. And then we could go back in here once again, and edit these two, the same account but now that is an other account. It'll now allow me to put this as a subcategory the other account. So then again, if we went through all of the edits, we want to make this a sub account of the Z personal deductions And okay, and then we went into here, edit. And we want to make this a sub account of the Z account.

And okay, and I'll just continue with these show you the result. So I've done that same process to all of these now and now made them a sub account of the personal deductions with a Z. And that should take it as far down on the income statement as we could basically go. So if we go back to the profit and loss by class then and say yes, then we could say, Okay, if we go to the bottom, it's going to be under the sub accounts and all the way in the other income, other expenses. So that's just another just kind of some grouping options that we can set these accounts up by, we still kind of need this this separate class, because if we were to see it in a profit loss, I'm going to go back to the profit and loss that doesn't have classes.

Then you could still see it's kind of broken down at the bottom and we could get to net ordinary income and this way, and then group all of our other stuff under And as long as we don't use any other expense categories, then that might be a nice way to go. However, you know, oftentimes, we might use other types of expenses for some reason other than just these personal expenses. But if not, that's another way that we can we can group this and it could make it a little bit easier for us to see net income here and then see everything else that we put down here that's personal, basically deductions without even needing the classes. So just a few formatting options within this method.