How do I add equipment I already own to my business?

You're correct that you can enter a JE to record this, but I think you should discuss it with your tax professional first.  Will you contribute the equipment to the business?  Will the business purchase it from you?  What type of entity is your business?  Which would be the best for tax purposes for you?

To enter a JE, go to Company>Make General Journal Entry.  Then you will debit the fixed asset and credit an account based on the above questions -- either owner contributions, due to owner, or something similar.

Also, you would need to record it at the FMV as of the date it is business property.

PLEASE mark this answer as solved (click the button under the answer in the lower, right corner) or post additional questions. Thanks so much!!!

Michelle L. Long, CPA, MBA
Author of the book "Successful QuickBooks Consulting: The Comprehensive Guide to Starting and Growing a QuickBooks Consulting Business"
National Trainer for Intuit Accounting Professionals Trainer/Writer Network
http://www.LongforSuccess.com
http://community.intuit.com/me...

Michelle,

Thank you for your reply.

My company is a Sole Proprietorship and I have no employees. I want my personal equipment transferred permanently into the business, so I can depreciate it. I realize I may be able to expense some equipment under a 2009 law, but I have almost no income yet, so depreciating it will probably be the best for me.

Please tell me if the following is equivalent to the Journal Entry procedure you are describing: 

I opened the the 'Furniture and Equipment' register fixed asset account. Then, I entered the FMV for each of my cameras under the 'Increase' column and selected the 'Opening Balance Equity' fixed asset account as the source.

Russ

Yes, but I would put it to Owner's Contribution (an equity account) instead of Opening Balance Equity (that is supposed to be zero).

PLEASE mark this answer as solved (click the button under the answer in the lower, right corner) or post additional questions. Thanks so much!!!

Michelle L. Long, CPA, MBA
Author of the book "Successful QuickBooks Consulting: The Comprehensive Guide to Starting and Growing a QuickBooks Consulting Business"
National Trainer for Intuit Accounting Professionals Trainer/Writer Network
http://www.LongforSuccess.com
http://community.intuit.com/me...

Hi again Michelle,

And thank you again for your comments! I will eventually understand all this :)

The reason I chose the 'Opening Balance Equity' account was that I was adding all this equipment on the same day the business was started, 1/1/2009. I thought that that was the purpose for this account.

Thanks,

Russ

the bottom line is that good practice is to document in detail whatever transactions you put into your internal bookkeeping records during the year, and take photocopies of relevant documentation (especially of larger or unusual items such as this) to put in in your year-end file folder that you are keeping for your year-end accountant - he/she will need to evaluate these and other matters when he/she comes to do the (different) calculations required for tax purposes and year-end adjustments

John,

Thanks for your comments.

However, I am planning to learn all I have to to do my own accounting and tax filing.

I may consult someone for some help, but I don't plan to hire an accountant.

I've run my own businesses for nearly 20 years already without ever using an accountant. And this is the first time I have ever tried to use accounting software. So far, I see nothing 'Quick' about QuickBooks. It seems to require at least 10 times as much data entry as any method I ever used in the past.

In the past, I just kept simple records for profit and loss, using Quicken and my bank statements to produce the data for the Schedule C. When I have been audited, I just showed up with all my receipts in a shoe box and checkbooks and the audits were painless.

I'm not sure that QuickBooks will be an advantage to me, but I will give it a chance.

thats a coincidence

i am an accountant, but i never plan to hire a photographer

i will simply purchase a digital camera kwikcam and some new "quickphotosoftware" and i will be an expert photographer

obviously no skills or knowledge are required to be a photographer, once i have the kwikcam and "quickphotosoftware" i will be an expert photographer and make a fortune.  the advertising on the camera box and on the software box says its so easy with the latest version 2.0 

i have plenty of experience because  i have looked at photographs for over 20 years and it looks easy to me.  

photography has always stayed the same, just like tax - nothing changes from year to year

John,

Your post was completely useless and uncalled-for.

arkayem:    the principle is perfectly accurate

just interchange "accounting" for photography" backwards and forwards - it reads the same

and in addition, please note that  my previous post was almost an exact mirror-image of the OPs previous post, yet you did not object to that -  thats what a dictionary would call "discrimination"

John,

Stop being ridiculous.

The whole point of buying Quickbooks software is to learn to do the books on your own. If I wanted an accountant to do the books I would hire one.

If you buy a camera, do you then go out and hire a photographer to go around with you to help you take your pictures?

arkayem:

that unfortunately shows a potentially dangerous lack of perception - perhaps it is not very clear to you that there is a lot of difference between tracking your groceries and the kids allowance on the one hand, and playing outside of the sandbox in the business world on the other where there are consequences  -----     one does not have to report kids allowances and groceries to the IRS, banks, shareholders, partners, etc, and nobody outside the family cares

"The whole point of buying Quickbooks software is to learn to do the books on your own" 

 perhaps you can get a written statement from intuit that they have now replaced all colleges and universities in north america - i think you'll find that they do not agree with your statement

 and personally i would not be so silly as to personally do business operations with my family camera even though i know how to operate it - i know where my skills are and where they are not ;)

 as i said above:

it is good practice to document in detail whatever transactions you put into your internal bookkeeping records during the year, and take photocopies of relevant documentation (especially of larger or unusual items such as this) to put in in your year-end file folder that you are keeping for your year-end accountant - he/she will need to evaluate these and other matters when he/she comes to do the (different) calculations required for tax purposes and year-end adjustments
 

I urge you to rethink your position on using an accountant. Intuit makes QuickBooks easy to use. That also means that it is easy to use incorrectly. Eventually you will run into trouble. It may be the result of an audit or just a string of bad decisions based on the faulty information in your QuickBooks. You will then hire someone like myself, at $100 to $150 per hour, to clean up the mess. The cost of cleaning up the mess will be approximately 10 times what it would have cost you to have an a bookkeeper keep your books or have an accountant trained in QuickBooks periodically look at your books to make sure you are doing things properly.

It is apparent that you do not have the knowledge necessary to do your own bookkeeping. That is not a put down. After all, we cannot be masters of everything. Furthermore, a trained accountant would be able to do things much quicker and easier than you could. While you are struggling to do the bookkeeping, you are not doing activities that could bring in more revenue. Your time would probably be better spent being a photographer than a bookkeeper.

Finally, running a successful small business means that your need to spend your time doing the things that only you can do to bring the most value to your business. Ask yourself which option brings the most value to your business and let that guide you regarding who should be doing your bookkeeping.

I hope this helps.

Will

Hello,

I wanted to interject myself into this conversation before it gets out of hand. A little history about myself: I have a Bachelors in Accounting, have been a Certified Pro Advisor, and worked with QuickBooks for many years. I have always done my own personal taxes; first by paper when all I needed was a a 1040EZ, and then using Turbo Tax when my financial situation started getting more complicated.

A few years ago my wife and I bought a franchise and opened up with 5 employees. Even with my (higher than the average Joe) knowledge of QuickBooks and basic accounting principles I still paid an accountant to come in and setup my books properly. My rationale was that I had little practical knowledge of accounting and the stakes were too high for me to make a mistake. Once my books were setup I took over the day to day input because I knew that I could do that with little concerns. I still paid an accountant to do a mid-year review and EOY review as well as my corporate taxes (way above my head on that.)

Does all that mean that I endorse the opinion that EVERY business needs to pay for assistance? Not always. My bill for tax preparation alone was just under $1000 last year and it was "just" a standard corporate return. Not every business can afford that and that is a practical consideration. If I have a tight budget and I have to make a choice between paying an employee, advertising to get more work, or pay for expert help, I know which one I will make. Somehow, I'll muddle my way through and put the (limited amount of) money to use where it is most needed.

However, if the budget can stand it, I think paying for help can actually save money in many cases. The first time I went to do my own business taxes I used software to do them (Sole Prop at the time) trying to save those fees ($600). Knowing that I didn't know what I didn't know, I paid someone to review my taxes. This was prior to my accounting degree and I wasn't aware of this magical thing called depreciation or how it worked. Short story long, that accountant, who cost me $600, was able to find deductions that I missed that helped me get $400 above and beyond what I paid her, back.

Sound wishy washy? Bottom line is that every situation is unique. While expert help is almost always beneficial, if you can't afford it (meaning there is literally no money for it) then you can't afford it. If you feel comfortable then do what you have to do. On the other hand "A man's got to know his limitations." If your situation is complex (and deep down, you know if it is) then trying to save money can end up costing you much, much more. Not to mention time and frustration.

So my advice is twofold:

1. You be the judge of your own business situation but be aware of your knowledge and abilities in areas outside of your scope of expertise.

2. Let's keep these discussions civil and realize that we are all here to help and learn from each other.

Jim