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Karen from the QuickBooks team explains that customizable tags are labels to track finances, providing deeper insights into your business. Tags can be applied to transactions like invoices, expenses, and bills, but do not affect your financial records. The tutorial covers creating tags and tag groups, adding tags to various transactions, and generating reports based on tags to analyze income and expenditures. To begin, navigate to Settings and Tags. It's important to determine which aspects of your business you want to track—such as job types, ad campaigns, or project management. Tags are fully customizable to meet your specific tracking needs.