In this article we will show you how to track self-employment expenses.
Being your own boss has many benefits. For starters, you can set your own hours and vacations.
Disclosure: This post contains affiliate links and I will be compensated when you make a purchase after clicking on my links, there is no extra cost to you
It gives you the flexibility to work remotely and spend some time enjoying a casual lifestyle. In fact, you may not have to sweat all day.
When you leave the comfort of traditional work, you’re just walking away from a fixed pay and benefits package.
You are also moving away from the pleasure of having a Human Resources department, as having your own startup business means submitting your own invoices, looking for clients with limitations to pay, paying estimated quarterly taxes and keeping track of your own business expenses.
Sign Up With Keeper Tax: Get a lot of tax write-offs here. Keeper Tax helps people with 1099 income automatically find tax write-offs among their purchases. Our average customer saves $6,076 per year!
Download the app
Tips of how to keep track of self-employment expenses:
First of all, it is important to understand what a business cost is, also known as self-employment costs. As defined by the IRS, these costs must be “normal” and “essential” to your business.
For example, domain hosting costs and the price of purchasing a URL for your business include your website as a business expense. However, you cannot deduct the cost of a personal website that has nothing to do with your business. If you are attending a business conference, the ticket and flights may qualify as business expenses.
Some good tips:
- Divide the notebook by weeks, months or quarters based on the amount of expenses you are recording.
- List all costs and staple the receipt to the page. If you have enough receipts, put a plastic pencil case in the notebook and put your receipts in the case. Write the date the cost was incurred, a description of the cost, and the amount as soon as possible after the cost to omit deductible costs.
- Keep track of your mileage in a separate notebook if you claim the standard mileage deduction instead of deducting your actual expenses. Enter the date, purpose of the trip, and total miles. Keep the laptop in your work vehicle. If you use more than one vehicle for your business, keep a notebook in each vehicle.
- Create a spreadsheet to keep track of your expenses. Make columns for date, beneficiary, cost type, and amount. Enter the information from your notebook into the spreadsheet. How often you choose to transfer information depends on the number of receipts you have.
Before you go, I hope this above article how to track self-employment expenses will be beneficial and informational for you.
More Tips On How to Track Self-Employment Expenses: