On lesson four covers transfers. And the reason why I wanted to break this lesson up and pay a little bit more more attention to transfers, because I would like you to understand how movement of funds within your accounts aren't necessarily always income and expenses. So sometimes you might move money around within your account. But but that money is not necessarily going to be calculated as income or an expense. It may just be movement of funds for a particular reason. So, let's start let's start out by talking about the different types of transfers that you may encounter.

When you are working inside of QuickBooks self employed, the transfer could be a credit card payment, it might be an owner's deposit. It may be an owner's withdrawal, or it could be something else. So let's let's break down these four types of transfers a bit further. So credit card payments, this is considered a transfer. So you're going to use this category for transactions where you are making a credit card payment. So if you have made charges and purchased items for your business, those items that have already uploaded from your credit card account into QuickBooks self employed, and you have already categorized those transactions as an expense, okay?

So therefore, it's going to show up on your profit and loss statement and it's going to reduce your income. Now when you make the payment for those credits, I mean for that, for those credit card charges, those payments themselves do not show up on your profit and loss statement. So in other words, The payments themselves are not used to calculate your net income, because remember, you have already included all of the purchases from that credit card in your expenses. So it's already showing up in your profit and loss statement. If you then turn around and use the money that you use to pay off your credit card, and you include that inside of your profit and loss statement, you're double dipping. So these transactions aren't business expenses, because you're not purchasing anything for yourself employed work, you're only just making a payment.

So therefore they are considered to be transferred, transferred, and they are excluded from all calculations, including estimated taxes and business expenses. The second type of transfer is owners withdrawal. This category you will use from your self employed finances, when you withdraw money from your self employed finances for your own personal use. So in other words you're paying yourself. So for example, let's say that you decided that you wanted to pay yourself on a pay off every Friday. So on this particular Friday, you withdraw $700 to pay yourself, this is considered a transfer, it's not considered an expense, so you're just paying yourself.

So that also is another form of transfer. And it's also excluded from from any of your calculations for estimated taxes or business expenses. And all of these are going to make a little bit more sense to you when you actually start working inside of QuickBooks self employed. The third type of transaction is a rather odd deposits. But this is a category that you're going to use When you add your own money to your self employed finances, so let's say for example, you have, you didn't make enough money in the month of April to cover all of your expenses. So your income was $500, your expenses were $1,000.

Well, you still have to pay those expenses. So what you're going to do is you're going to go into your personal funds, and transfer money from your personal checking account into your business account. So this is considered considered an owner's deposit. So this is not going to be considered income, therefore you're not going to be taxed on it. It's just considered owners is considered an owners deposit and you're just transferring money from your personal personal account into your business account. So this type of deposit differs from business income, because it's not money that was paid to you by someone else for work that you did.

And it also difference from personal income because you're because you're making the money available for your, for your self employed business. So in other words, you are investing in your business. And finally, you have just random other transfers. This type of transfer occurs if you have, say three or four different accounts connected to QuickBooks self employed. So if you have three accounts connected to QuickBooks self employed, and you are transferring money between each account, you would use transfer you will use a transfer option for this type of transaction. So you'd use this category for marking transactions that you move between different accounts.

These transfer these transactions once again, on business income, no other business expenses, so they are excluded from any calculation for estimated taxes or for business expense. fences. So whenever you have any of these types of transactions, whether it be credit card payment, and owners deposit and own an owner for Toro, or just some any some other kind of random transaction, you're going to use the transfer option inside of QuickBooks self employed