In this presentation, we will take a look at a method for tracking tax deductions related to education within our business accounts using a 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 are now going to open the check register and start entering some more checks from our bank statement to it. We will then go to the banking drop down and use register. We're going to select the checking account.

And we have been entering data we had enter data for two months prior to this. We entered a few in transactions for the month of March. And now we're going to continue with the month of March. Our system for bookkeeping is that we're just taking our information from our bank statement that we have spent money on in our business account, and now recording them into our check register. So QuickBooks can then process our reports. We have our normal transactions will include another one here, which will include the post office.

And then we've consciously made other transactions that we think might be deductible and therefore want to track them, including this time related to college payments for college tuition and college books, we want to track those items and see if we can deduct them, and therefore, we consciously paid them out of our business account. So because we're better at tracking that information in QuickBooks, so let's set up these we're going to go to the post office first, this just being a normal type of transaction, and then we will go from there. So the post office transaction happened on the seventh, so that's the date of March 7, and the cheque number was 1025. And we're going to pay the post office once again post office, and that's going to be for 320. And then once again, it's already populated for us post office here populates for us we don't need a class, because this is going to go into the unclassified because it's just going to be a normal business.

Expense, we're just using the class for those, we're going to pull out the normal business expense, check numbers repeated, that's okay. We're going to keep that that's fine. Next to transaction that we have, we're going to highlight this one and save it that one is done college. So we're going to say that we paid college tuition. This is a generic name clearly for a college, we're going to put this in place. And this is going to be something new.

It's not a business expense. It doesn't belong as an expense on our business income statement. But it is something that we want to try to track and we'll do that with the use of classes. So we've consciously paid the college out of our business account, because we want to track it within our QuickBooks account. So we're going to go back over here and say, okay, college that happened on 310 and the check numbers 1026 and we're just going to type in my college again, generic name. Now many colleges are called my college but we're going to type that in and say okay, add the vendor with a quick add as we normally would and it will be a vendor type, we'll keep it as vendor type, in this case 900 is how much we paid, then we need a new account to assign for it.

Now again, I'm going to call it personal deductions. So I can clearly label that on my on my reports. And then we're going to put for college costs, we're going to say these are college costs. Now we cannot see the the classes, I would like to assign a class as well unless we select these splits item. And then we're going to say personal college cost is not an account, I'm going to set it up. So we'll set up this account.

It's going to be an expense type account. That's what we want. That's all we're going to do. Now. That's all we need. Save and Close.

Now we're going to go to the split and split that. And then we're just going to add our class, our classes now are going to be the tax deduction, personal. So once again, this being only when we use the only thing we use, if it is outside the norm, otherwise it's going to be uncategorized which will be the norm, and then we're going to save that I'm going to keep the number that's okay. And we're gonna do this one more time we've we've done this for the College Bookstore for the college tuition, I'm going to think that's tuition. And then we've got the bookstore. So now we got the College Bookstore paying for books.

Again, not business related, but something that we might be able to duck deduct for personal expenses. So this is going to be on 310 as well. Check number is 1027. And we're going to add a new account, generic name bookstore, from my college, boy college, college, and tab, quick add that account, vendor type account, we're going to say we paid 100 bucks for the books. And once again, we need the account name. Now I'm just going to put this into the group, same group, which is going to be personal deductions, college costs that we just set up and I'm going to give an exam But we don't assign a class here.

And then we'll look at the reports and will easily be able to go back and assign the class. So we'll say, record that. Keep the check number, that's fine. And then we're going to take a look at our reports. Now, reports drop down, we're going to go to company and financial, and we can't really look at the profit loss is going to combine them. Just to give an example if we were to choose the profit and loss, we're going to say that we have now Oh, 10119 to 1230 119, that's January 1 2019, to December 31 2019.

And there's no classes here. So we were going to have this account for the college costs there. And that it's labeled that it's going to be personal. And so we could pull it out. We can print this and pull it out. I can export this to excel and remove that item.

But no, it's going to be there because we added the expense account. So we have to look at it by classes. And that'll give us a better calculation of net income. So if we then go to reports up top, and we go to company and financial, and we go down to the income by class, profit and loss by class, and then change the dates from a 10119 to 1230 119, that's January 1 to December 31 2019. Then we'll have these these personal deductions for the 315. And the 900.

Note, this item is now an unclassified unclassified. Now it's our default. Remember, this is this is basically our business expenses, the ones that we pulled out and assigned a class to, or the items that we need to pull out of the default being our normal business expenses. So we're going to change this one by just double clicking on it. Double clicking on that transaction, and then just changing this class field to tax deduction, personal, save and close, save the changes, close it back. out.

And that's how easy it is to kind of go in here anything that we see that's in the personal items that's under the default, we can easily go in there and just assign it to a class and move it over to the proper location. So we have now found this item. So we're going to cross that out and highlight that on our bank statement. Next time we're going to continue on, we're going to continue on Epiphone is our normal vendor that we pay for the guitars that we sell in our business, that's a normal business that we're going to say as an expense the way we're setting it up, and then each childcare will be the next item that we will go into, which is something that might be deductible for tax purposes, and something that we want to track and see if we can provide it but isn't a business expense, so we'll use the same method to do so.