How should I categorize my business expenses?

How do I categorize my business expenses?

When you track an expense in Found, either by using your Found card or by adding a bookkeeping record, you’ll be asked to assign a category to that tracked expense.

Categorizing your business expenses makes filing taxes easier, with each of Found’s categories corresponding to lines on your tax form. Whether you’re taxed as a sole proprietorship and file a Schedule C or your business operates as a corporation and files an 1120 form, Found’s categorization features help you report all of your expenses appropriately.

How should I categorize my expenses?

For each of your expenses, you should choose the expense category that most closely relates to the type of purchase that you’ve made. For example, if you spent $20 at a business lunch, the “Business Meals” expense category works best. Traveling for work? Find the appropriate category under the “Travel, auto, meals” list in your app.

You may find that your expense doesn’t fit squarely into any of the available categories. That’s ok! You can mark the category as “Other.” Or, if you’re a Found Plus subscriber, you can create a custom category to track this type of expense. Custom categories map directly to Found categories.*

How does my Found card help with categorizing my expenses?

If you make a purchase with your Found card, the app will automatically attempt to categorize your expense on its own based on the type of merchant that’s listed on the expense record.

For example, restaurants and coffee shops will often be automatically categorized as “Business Meals” expenses. You can change these suggested categories at any point by clicking into the expense record, and selecting the category.

How do Found’s categories match with my tax forms?

Depending on how your business is taxed you’ll file different forms with the IRS when filing your taxes: Schedule Cs for sole proprietors, 1120 forms for C Corps, or 1120-S forms for S Corps. Here’s how Found’s categories map to those forms:

Found category	Schedule C	Form 1120 / 1120-S
Accounting services	Legal and professional services	Other deductions
Advertising and marketing	Advertising	Advertising
Airfare	Travel	Other deductions
Bank and credit card processing fees	Other expenses	Other deductions
Business equipment	Supplies	Other deductions
Business licenses and permits	Taxes and licenses	Taxes and licenses
Business lodging	Travel	Other deductions
Business meals	Deductible meals	Other deductions
Car, truck, vehicle	Car and truck expenses	Other deductions
Cell phone service	Utilities	Other deductions
Commissions and fees	Commissions and fees	Other deductions
Computer equipment	Supplies	Other deductions
Contractor services	Contract labor	Other deductions
Depletion	Depletion	Depletion
Employee benefits	Employee benefit programs	Employee benefit programs
Employee catering	Other expenses	Other deductions
Employee retirement and profit sharing plans	Pension and profit-sharing plans	Pension, profit-sharing, etc., plans
Employee wages	Wages	Salaries and wages
Employer taxes	Taxes and licenses	Taxes and licenses
Equipment rental	Vehicles, machinery, and equipment	Other deductions
Furniture	Supplies	Other deductions
Gifts	Other expenses	Other deductions
Insurance	Insurance	Other deductions
Interest	Interest (Other)	Interest
Items purchased for resale	Purchases less cost of items withdrawn for personal use	Tracked on Form 1125-A
Legal services	Legal and professional services	Other deductions
Maintenance and repairs	Repairs and maintenance	Repairs and maintenance
Materials to make goods to sell	Materials and supplies	Tracked on Form 1125-A
Mortgage interest	Interest (Mortgage)	Interest
Office rent	Other business property	Rents
Office supplies	Supplies	Other deductions
Office utilities	Utilities	Other deductions
Other	Other expenses	Other deductions
Other non-deductible expenses	n/a	n/a
Other office services	Office expense	Other deductions
Other services	Legal and professional services	Other deductions
Other travel	Travel	Other deductions
Parking and tolls	Car and truck expenses	Other deductions
Postage and shipping	Office expense	Other deductions
Professional development	Other expenses	Other deductions
Sales tax (paid by buyers)	Taxes and licenses	Taxes and licenses
Software and subscriptions	Other expenses	Other deductions
Transportation	Travel	Other deductions
Vehicle lease	Vehicles, machinery, and equipment	Other deductions

*A limited number of bookkeeping features are available at no cost. After reaching certain usage thresholds, additional features will be accessible through a Found Plus subscription. Found Plus is available for $19.99 per month or $149.99 per year.

The information on this website is not intended to provide, and should not be relied on, for tax advice.

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*Found is a financial technology company, not a bank. Banking services are provided by Piermont Bank, Member FDIC. The funds in your account are FDIC-insured up to $250,000 per depositor for each account ownership category.

The Found Mastercard Business debit card is issued by Piermont Bank pursuant to a license from Mastercard Inc.

The information on this website is not intended to provide, and should not be relied on, for tax advice.

**Direct deposit funds may be available for use for up to two days before the scheduled payment date. Early availability is not guaranteed.

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