📚 What Chart of Accounts Does Hedgi Use?

Inside Hedgi’s tax-aligned, CPA-ready category system.

Unlike most bookkeeping apps, Hedgi doesn’t guess when it comes to categorization. We use a full IRS-aligned chart of accounts built for real-world tax filings — from Schedule C and 1120S to GAAP-compliant P&L reports. It’s the backbone of our automation, journaling, and agentic review.

Here’s what you need to know.

🧾 Category Design Philosophy

Hedgi’s chart of accounts is:

• 🧠 Tax-prep aligned — based on IRS deduction lines and entity tax forms

• ⚖️ Audit-friendly — avoids vague categories like "Miscellaneous"

• ⚙️ Automation-ready — supports deterministic rules, AI fallback, and journaling

• 🔒 Locked to prevent user error — no duplicate or redundant categories

🔹 Category Types in Hedgi

Assets (1000s – 1700s)

• Cash, AR, inventory, loans to partners/shareholders, investments

• Fixed assets with MACRS/SL tagging (e.g., "MACRS 5-year property", goodwill, land)

• Accumulated depreciation, depletion, amortization

Liabilities (2000s – 2200s)

• AP, credit cards, payroll liabilities, loans, notes payable

• Short- and long-term classifications supported

Equity (2300s)

• Capital stock, retained earnings, partner/shareholder basis, APIC, treasury stock

• Adjustments, non-dividend distributions, accumulated adjustments account (AAA)

Income (3100s – 3150s)

• Gross receipts, returns, rents, royalties, interest, dividends, PPP forgiveness

• Fundraising and nonprofit income (if applicable)

COGS (4100s – 4145)

• Purchases, W-2 and non-W-2 labor, materials, additional 263A costs, inventory adjustments

Operating Expenses (5000s – 5405)

A comprehensive list including:

• Advertising (5010)

• Automobile and Truck (5015)

• Meals (5245 / 5250 / 5240)

• Contract Labor (5080, 5175, 5325)

• Insurance (5180–5205)

• Payroll (5350–5355)

• Utilities (5400)

• Depreciation (7010), Amortization (7000)

• …and over 100 more, all mapped with IRS-compliant detail

Includes expense flags for non-deductible items (e.g. entertainment, penalties, owner use)

Other Income / Deductions (6000s – 7060)

• Capital gains, foreign tax, loan forgiveness, royalties

• Nonprofit-specific or advanced scenarios like 263A costs and investment adjustments

🧠 Special Hedgi Categories

• "Unknown - For Hedgi+ Review" (9999)
  Flag used when transactions fall outside logic or classification thresholds

• "Journal Base Account"
  Used internally for balancing automated journal entries

• Agentic-Only Logic:
  Capital assets, payroll splits, depreciation and amortization are handled with custom journal logic at month-end

🧰 Can I Add or Edit Categories?

No — and that’s by design.
Hedgi prevents user-defined categories to:

• Preserve IRS compliance

• Enable audit-ready reporting

• Ensure consistent automation across months

• Avoid duplicate or misleading labels (e.g. “Meals” vs “Meals 80%”)

If you’re missing something specific, Hedgi support may be able to tag or memo it, but your base categories remain standardized.