Siobhan Says: Where Does this Go? (Your Quick Guide to Sorting Expenses)

Dear Confused,

You’re not alone. I get some version of this question at least five times a day: “Siobhan, I just bought a computer… where does it go in my books?”

And I get it—when you’re staring at 47 category options in QuickBooks, it feels like a high-stakes game show where one wrong answer will trigger an IRS audit.

Here’s the truth: wrong categories won’t ruin your business or your ability to grow your business immediately. But they will mess up your reports, and you’ll make decisions based on bad information.

Quick example: A food truck owner thinks food costs are 25% of sales. Looks healthy! But their to-go containers and napkins are hiding in “office supplies.” Real cost? 35%. They’re underpricing everything and wondering why they’re always broke.

Or tax time hits and your accountant sees $8,000 in “office supplies” and starts asking questions. Now you’re digging through months of receipts explaining it’s napkins, not printer paper.

The good news? Once you know where things go, you can set up rules in your accounting software to automate the process. Buy napkins from the same supplier? Boom—automatically sorted every time. This guide gives you the answers so you can stop second-guessing and get back to running your business.

So let’s fix this right now.

Office & Computer Stuff

• Laptop, monitor, printer, desk: Equipment (over $2,500) or Office Supplies (under $2,500)
• Printer paper, pens, sticky notes: Office Supplies
• Microsoft 365, Dropbox, Zoom subscription: Software/Subscriptions or Office Expenses
  Pro tip: Keep subscriptions in one category to easily spot what you’re no longer using.

Marketing & Getting Customers

• Facebook, Google, Instagram ads: Advertising
• Canva, Mailchimp, social scheduling tools: Marketing/Advertising
• Business cards, brochures, branded merchandise: Marketing/Advertising or Printing & Reproduction
  Tip: Pick one category and stick with it to track total marketing spend.

Getting Around for Business

• Uber/Lyft for meetings or work travel: Travel
• Car maintenance: Auto Expenses (business use only)
• Gas for client meetings: Auto Expenses OR Mileage (pick one method for the year)

Business Travel & Meals

• Plane tickets, hotels, Airbnb: Travel (must be overnight from your tax home)
• Meals while traveling: Meals & Entertainment (50% deductible)
• Conference registration, workshops, trade show booths: Education/Training or Travel

Meals & Meetings

• Coffee with a potential client: Meals & Entertainment (must have a business purpose)
• Lunch while working: Personal expense (unless traveling overnight)
• Catering for client events or team meetings: Meals & Entertainment

Work Space & Utilities

• Office rent: Rent/Lease
• Internet/phone bills: Utilities or Telephone (split personal/business use)
• Coffee/snacks for office: Office Supplies OR Meals & Entertainment

Paying People

• Employee payroll: Payroll/Wages
• Indepedent Contractor/freelancer: Contract Labor or Professional Services
• Accountant, lawyer, consultant fees: Professional Services

Quick Decision Tree

Still unsure? Ask yourself:

1. What is this helping me do? (Market your business? Serve clients? Run operations?)
2. How often will I buy this? (One-time = Equipment; Regular = Supplies/Expense)
3. Are there tax rules to follow? (Meals = 50% deductible; Mileage = standard rate)

When in doubt, pick the category that makes the most sense and stay consistent. Clean books aren’t about knowing more—they’re about having a system.

Disclaimer

This article is written for information purposes only and does not constitute tax advice. If you have specific tax questions, please consult your CPA or tax advisor.