QB Issue Resolution:
“I wanted to followup and say at the moment in my Journal Entry (which the phone support walked me through) I setup an “Opening Balance Equity.” I believe this is what you are referring to right?”
That is a meaningless bucket. You should use “real” equity. You likely have one named Owner Equity, or Retained Earnings. OBE should be 0, if it got used at all, and never used again, once a file is set up and In Use.
“Or is it a different equity that works in a different report. I have done this for my bank accounts and also my credit cards and all of my books balance at the moment.”
You allowed a generic offset of OBE = “I don’t know where this came from.”
Money in the bank Increases your equity. Debt on loans and credit card Decreases your equity.
And do not use Journal Entry for Credit card purchases. You enter that as an expense paid from the Card, to see the Balance you owe is explained with Purchased From names, and Details. Not some generic OBE.
“My business made almost no money in 2017”
That has no impact on what your task is, here. The task is to Track Everything properly. And you don’t know if it “made money” or not, without Tracking everything properly. We already discussed that you Took Draws. You called them Distributions. Let’s review some basics:
You cannot Take something that doesn’t exist; that sort of belies the comment regarding 2017 activities.
Draws from Equity are for Sole Proprietorships and Single-member LLC as disregarded entities (filing Sched C with your 1040 tax form). Distribution is the word for Shareholders taking funds from a Corporation (filing 1120 or 1120S) and corporations have no owner. You might be a shareholder; yet, a working shareholder has to be paid through payroll before taking any distributions at all. A Partnership LLC files a 1065. This changes how you manage the accounting. Please see my attachment.
See why you need to meet with your own CPA to review your operations, learn what applies to the Financial management of this entity, to avoid getting it wrong?
“so if I am paying anything unreasonable in taxes I know I have made a mistake, obviously I don’t want to pay taxes again on the initial equity since we already paid taxes on it last year.”
You need to review this in person with someone who can look at your paperwork and work with you and guide you. And you know the tax laws just changed, right? Going forward with 2018 data, do you know What changed, for you? That’s why you seek out a professional.
We don’t know what is your business, but you would not want to see someone do what you do Professionally, as if that is a Hobby thing casually done by nearly anyone. We respect other professionals for what they know and can provide to us.
Resolution for Issue 'Are Owner Distributions supposed to show up on Profit and Loss Statements or not? Hi. I have a running business that has been going for a few years now. I took over my books and am doing it myself this year since it is much simpler than in the past. I have two questions, one of which is in the title. 1) For my bank accounts that have an initial balance, this is technically all profit from the previous calendar year. At the moment I just put a reconcile statement to get the books to balance on Jan 1 2017. Is this correct? Or do I need to categorize it as something special so the Owner Distributions (Equity) are balancing out properly to these initial amounts? 2) I originally had the owner distributions marked as expenses which i later realized was incorrect. Are these distributions supposed to show up on the Profit & Loss Statement or not? I am simply trying to file my business taxes and after I get these two things sorted out I think everything is right. Thanks' available: Yes (Solved).
Source: Intuit Community forum.
Are Owner Distributions supposed to show up on Profit and Loss Statements or not? Hi. I have a running business that has been going for a few years now. I took over my books and am doing it myself this year since it is much simpler than in the past. I have two questions, one of which is in the title. 1) For my bank accounts that have an initial balance, this is technically all profit from the previous calendar year. At the moment I just put a reconcile statement to get the books to balance on Jan 1 2017. Is this correct? Or do I need to categorize it as something special so the Owner Distributions (Equity) are balancing out properly to these initial amounts? 2) I originally had the owner distributions marked as expenses which i later realized was incorrect. Are these distributions supposed to show up on the Profit & Loss Statement or not? I am simply trying to file my business taxes and after I get these two things sorted out I think everything is right. Thanks: this issue or error code is a known issue in Quickbooks Online (QBO) and/or Quickbooks. Support for this issue is available either by self-service or paid support options. Experts are available to resolve your Quickbooks issue to ensure minimal downtime and continue running your business. First try to resolve the issue yourself by looking for a resolution described below. If it is a complex issue or you are unable to solve the issue, you may contact us by clicking here or by using other support options.
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