If you’re starting your books in Ambrook at the beginning of the year (i.e. 01/01/2025), you might have a few transactions that cleared your bank account in the current year (2025) that were actually expenses already captured on your previous year’s (2024) tax return.
Here’s an example:
You wrote a check to a vendor for an expense in November of 2024
This transaction was captured as a 2024 expense in your previous accounting software
Your CPA does your 2024 taxes and includes this expense as part of that return
The vendor doesn’t cash the check until January 2025
Since the start date of your books in Ambrook is 01/01/2025, you now have a transaction that is showing up on your bank account in January, but it’s already been accounted for as an expense on your 2024 tax return. You don’t want to categorize this expense again in Ambrook for 2025, because it’s already been expensed in 2024.
What should you do?
In this situation, you can create an “Other Expense” category called 2024 Carryover. This category will appear under your net operating income on your P&L, clearly showing these expenses as something that should be excluded by your CPA for 2025.
To do this, go to Settings → Categories → Add
Add the category name and be sure to choose “Other Expense” as the category type:
Tag any transactions that cleared in 2025, but were already categorized on your 2024 tax return with this category.
These transactions will now appear separately from your net operating income on your P&L, making it easy for your CPA to find and exclude these transactions from your 2025 financials.