This article is my in-depth Ruby Money review with pros and cons, Ruby Money features, and a detailed overview of its pricing and benefits for solopreneurs.
2023 was my first year paying quarterly estimated taxes to the IRS, and I was a little anxious to make sure everything went smoothly (I didn’t want any penalties for underpaying).
As a solopreneur SEO specialist, marketing manager, and father of 6 kids, I don’t have extra time (or cash) to burn on tools that are overly complicated or aren’t a good fit. That’s why I’m always eager to try new tools and share my experiences here.
If you are looking for an affordable tax planning tool that’s designed for solopreneurs and freelancers, Ruby Money might be a great fit for you.
Table of Contents
Okay, let’s dig into my Ruby Money review.
What is Ruby Money?
Ruby Money is “the accounting app that pays your taxes.” In short, it’s a tax planning app designed specifically for solopreneurs, freelancers, and side-hustlers.
That means it’s quick, simple, and very affordable for those of us who are building our side hustles into something a little more substantial.
Ruby is relatively new to the fintech space, but they have jumped in with all the right tools and people in place.
I started using Ruby Money to manage the tax planning for my SEO consulting business in October 2023 and haven’t looked back. I first ran across Ruby Money after seeing the founder, Angie Moody, share some helpful tax planning tips on LinkedIn.
Here’s my first receipt:
This crazy-simple accounting software detects what’s income, what’s a write-off, and pays your taxes for you.
How does the Ruby Money app work?
1. Sign up for a Free 7-day trial.
If you follow the link above on your iPhone or iPad, it will take you to the App store where you can download the tax planning app. Sign up to start your 7-day trial. If you use my affiliate link above, you’ll also get $50 off your plan.
2. Answer a few questions and securely connect your bank.
This is a super-quick process that includes logging in to your online banking via their hyper-secure Plaid connection.
3. Enter your predicted self-employed expenses for the year (and any W-2 income).
You’ll need to make a rough estimate of your total self-employed expenses for the current year. Don’t worry about the details, you can adjust it as you go and the app will always estimate required tax payments based on the previous payments. There’s no need to do napkin math anymore.
Ruby Money recommends your quarterly tax payment amount based on these 4 key factors:
- Your income payments in the connected bank account.
- Your estimated total expenses for the year (manually entered).
- Your previous quarterly tax payments to the IRS.
- Your expected W-2 income (if any).
4. Ruby goes to work, tracking your income, finding write-offs, and calculating your taxes in real time.
Because the Ruby team is so committed to continually improving their app, they’ve built a great system that enables you to quickly mark expenses as either personal or business-related. You can also choose to assign the expense into 1 of 15 expense categories.
Then, you’ve got a neat and tidy report (automatically built) for your year-end IRS tax filing.
5. When it’s time to pay your quarterly taxes, you get a personalized tax estimate and can pay from the app with a few taps.
You’ll never have to worry about missing an IRS deadline again.
Ruby sends scheduled reminders of when quarterly taxes are due, and shows you exactly how much you should pay—not too much, not too little.
What you can do with the Ruby Money App?
The simple truth is that dealing with the IRS can be a stressful experience.
Even if you’ve double-checked everything, we always have this nagging worry that a client’s invoice has been forgotten along the way. Or, even worse, you might forget to record an expense and overpay on taxes (ouch!).
Ruby Money is how I pay the IRS exactly what they need—and nothing more.
- Automated Tax Tracking: Connects to your bank accounts to track income and expenses, categorize transactions automatically, and calculate potential tax liabilities. This saves time and reduces the risk of manual errors.
- Estimated Tax Payments: Based on your income and expenses, Ruby Money helps you estimate and schedule your quarterly tax payments to the IRS. This helps avoid penalties and interest for underpayment.
- Deduction Identification: The app uses algorithms to scan your transactions and identify potential tax deductions based on predefined categories. This helps you maximize your tax savings (and time).
- Expense Tracking: You can record and categorize your business expenses in the app, allowing you to better understand your spending habits and identify areas for cost reduction.
- Financial Reports: Ruby Money generates basic financial reports like income statements and balance sheets, providing insights into your overall financial health.
- Bank Account Connections: The app can connect to multiple bank accounts and credit cards, giving you a centralized view of your finances.
- Mobile App: Access your finances and tax information on the go with the user-friendly mobile app available on iOS and Android devices.
If you want to try Ruby Money, here is a registration link for you (free trial).
Ruby Money pros and cons
This was my first year sending in quarterly tax estimates to the IRS, and I tested all the most common ways to send in the payments.
At first, I wasn’t sure that anything could beat Quickbooks, but the Ruby Money team really knows what solopreneurs need! With the app, I pay the right tax amount each quarter—without having to deal with the complicated IRS website.
Pros
- Automatic tax management: Ruby Money automatically tracks income and expenses, estimates quarterly tax payments, and sets money aside for them. This can save solopreneurs a significant amount of time and effort compared to manual bookkeeping.
- Deduction identification: The app scans for potential tax deductions based on your transactions, helping you maximize your tax benefits.
- Tax advisor access: Paid plans offer access to tax advisors who can answer questions and provide guidance on specific tax situations.
- User-friendly interface: The app is designed to be simple and easy to use, even for those with limited accounting experience.
- Data security: Ruby Money uses industry-standard security measures to protect user data.
Cons
- Limited scope: The app is primarily focused on tax management and doesn’t offer features like invoicing, inventory management, or project tracking.
- Accuracy limitations: The app relies on algorithms to identify deductions, which may not always be accurate. Solopreneurs should carefully review deductions before claiming them.
- Tax filing limitations: While the app helps estimate and save for taxes, it doesn’t actually file tax returns.
Ruby Money pricing
The Ruby Money app offers a free plan with basic features but also features paid plans with additional functionalities. I jumped right into their monthly “Plus” plan at first, but now I opted for the annual plan to get an even better deal.
Here’s a breakdown of the cost options:
Starter (Free Plan) – $0 / monthly
- Write off Detection
- Smart Bookkeeping
- Quarterly tax bill estimates
- Tax-ready reports
Plus (Paid Plan) – $20 / monthly
($16/month if you choose to pay annually)
The Plus plan includes all features of the Starter free plan, plus:
- Quarterly tax filings
- Tax savings rules
- Live reviews with a tax advisor
- Priority customer support
Remember, these are current prices as of February 15, 2024. It’s always best to check the Ruby Money website for the latest pricing information and any potential promotions or discounts.
Ruby Money vs. Quickbooks Self-Employed
I used Quickbooks Self-Employed for almost half of 2023, my first year of paying quarterly estimated taxes. Quickbooks SE is a version of the long-standing Quickbooks tool from Intuit—and likely the market leader of financial tracking and budgeting apps.
It was okay, but I found Ruby Money and moved on after my 3-month trial ended.
Why I switched to Ruby Money (from Quickbooks).
Here are the five reasons I jumped ship and went all-in on Ruby Money:
- Easy-to-use app. Quickbooks SE has some core features that I never used. Namely, I didn’t like the invoicing tool (Stripe is way better) and I didn’t need a mileage tracker. There was no way to hide those tools, and they took up an annoyingly large section of the app’s homescreen.
- Seamless quarterly IRS payments. Ruby Money connects with the IRS payment portal much more seamlessly (the most important part for me). If IRS website overwhelms you as much as it did me, you’ll love the user experience of Ruby Money.
- High-quality service. Ruby provides high-quality service, right from Day 1. Right after I signed up, I got an invite to a 1:1 zoom call to help find out how they could improve the app to better fit others in my business situation.
- A few days later, I was talking to Angie Moody (CEO) and realized this was more than just a cool app idea for her. You’ll never get that level of exceptional service from a massive company like Quickbooks. Ruby is on a mission to help solopreneurs succeed!
- Simplified and accrurate tax savings. One-touch transfers to save the right percent (%) of cash for taxes, for every paycheck I get. Quickbooks is just a tracking tool, but Ruby Money can create 2 specific accounts for your savings — taxes and retirement. I get to pick my own percentages and activate transfers for every income payment I want to (without pulling out my iPhone calculator). This way, I can make sure that I have the right amount of cash on hand when the quarterly due date comes up.
How I Use Ruby Money and Profit First:
I use the Profit First book and approach for all of my budget allocations and expense planning. So, it was crucial to find a tax planning and expense tracking tool that could work alongside the Profit First model.
If you’re not familiar with the popular business budgeting system, it’s a helpful financial planning system that uses 5 separate bank accounts as buckets. Income always arrives in bank account #1, then you separate it out to the other 4 accounts based on a pre-determined percentage.
You can visit the Profit First website here.
This is how I use Ruby Money inside of my Profit First financial flow at Ragon Creative:
My Budget Allocation Flow via Ruby Money
Bank Account | Purpose & Plan |
---|---|
1 – “Income” | Connected to Ruby Money. All invoice payments arrive here. |
2 – “Taxes“ | Located inside of Ruby Money. One button-click sends 20% of each invoice payment to my tax savings account. |
3 – “Operating Expenses“ | XX% gets transferred into this account to keep providing great services to my SEO clients. |
4 – “Owner’s Comp“ | XX% gets transferred into this account to help pay the bills. |
5 – “Profit“ | XX% gets transferred into this account to save for business growth and development. |
Expenses are paid from my “Income” bank account, to make sure they are automatically recorded in Ruby. Then I replenish that account via my “Operating expenses” bank account.
FYI – A little birdie told me that Ruby plans to enable users to connect multiple bank accounts later in 2024. That will make everything move even more smoothly!
FAQ
Does Ruby Money work for LLC businesses?
Yes, Ruby Money for both sole proprietorship and LLC businesses, although it’s especially designed for single-member LLC companies. This should cover the needs of most solopreneurs.
My wife and I run a multi-member LLC for our marketing and SEO consulting business (Ragon Creative). Our solopreneur income is considered a pass-through, and Ruby helps me combine it with our W-2 to get an accurate estimate of how much our quarterly taxes should be.
Will Ruby Money automatically include my previous income and expenses from this year?
Yes, as long as they occur within the bank account connected with Ruby. If not, there’s a quick way to add both income and expenses manually.
Will my accountant be able to use the Ruby Money financial reports?
Yes, most likely. If you have an accountant who helps file your taxes or advises you on financial matters, then the Ruby Money app provides all of the key reports they’ll need to review.
Is Ruby Money free?
Yes, the Starter plan is 100% free, but I recommend testing out the 7-day free trial of the Plus plan to get a complete preview of how the Ruby Money tool will fit into your financial workflow. If you want to connect to the IRS and use the app to pay your quarterly taxes then you’ll need to get the Plus plan.
What are some Ruby Money alternatives?
Sure, here are some additional alternatives to Ruby Money for solopreneurs:
Wave: A free accounting software that offers invoicing, expense tracking, and bank reconciliation. It does not have tax calculation features, but it integrates with several tax preparation services.
GnuCash: A free and open-source accounting software that offers a wide range of features, including double-entry accounting, invoicing, and investment tracking. However, it can be more complex to learn and use than other options on this list.
Harvest: A time-tracking and invoicing software that can be used to track billable hours, create invoices, and send them to clients. It has a free plan for one user, with paid plans starting at $12 per month.
When choosing an alternative to Ruby Money, consider your needs and budget. If you need a comprehensive accounting solution, FreeAgent or Zoho Books may be a good option. If you are on a tight budget, Wave or GnuCash may be better choices.
What bank accounts does Ruby Money support?
Ruby uses Plaid to connect to your bank account, so it’s highly secure and connects to over 11,000 financial institutions across the United States, Canada, and Europe.
How safe is your data with the Ruby Money app?
Like with every respectable financial tech company, privacy is a big deal for Ruby Money. They use industry-standard 256-bit SSL encryption and partner with industry leaders such as Plaid to secure your financial information.
Is there any customer service or accounting assistance available from Ruby Money?
Ruby Money provides exceptional customer service. This excellent service is one of the things that won me over as a new customer (from Quickbooks Self-Employed).
I had a couple of quick questions during my setup and the team responded during the same day (within hours). You can tell the Ruby Money crew takes pride in their brand and intentionally provides high-quality customer service, which is crucial for us solopreneurs.
They offered a free onboarding call when I signed up, and the CEO personally walked me through some quick tips on how to best use the app and track my self-employed tax liability.
Tax Advisor Access: The Plus plan offers access to dedicated tax advisors who can answer your questions and provide personalized guidance on specific tax situations. This can be a huge win if you’re navigating complex tax issues.
Concluding notes on this Ruby Money review
If the only certain things in life are death and taxes, then you might as well use a tool like Ruby Money to make it as painless as possible.
- Your needs and budget: Solopreneurs with complex tax situations or high earnings may need a more comprehensive accounting solution.
- Your comfort level with technology: If you’re not comfortable using apps to manage your finances, Ruby Money may not be the best fit.
- Alternatives available: There are other apps and services available for solopreneurs, so it’s important to compare options before making a decision.
Overall, Ruby Money can be a valuable tool for solopreneurs who need help managing their taxes and maximizing their deductions. However, it’s important to weigh the pros and cons carefully and consider your individual needs before signing up.
Disclaimer
The content on this site is for informational and educational purposes only and should not be considered professional financial advice. I may be compensated through 3rd-party advertisers, but my content is based on my objective opinion and analysis.