Preparing Your Self-Employed Business Expenses for Taxes

Tracking your business expenses for self-employed tax filing is critical. Here are the basics of how to prepare your self-employed business expenses for taxes. 

Spreadsheet

Throughout the year, you should try to do your best to keep track of all of the business expenses that you incur. At the end of the year, you will be able to easily refer back to your spreadsheet to see what business expenses you have. 

Receipts

In addition to keeping track of your business expenses with a spreadsheet, you should also make sure you hang onto all of your receipts. Anything that you purchase for the purpose of your business, you need to keep a receipt of it because you can deduct it from your taxable income when you file your taxes. You will not have to provide these receipts to the IRS when you file your taxes, However, it is a good idea to keep them in case you are audited.

Home Office Deduction

One of the most complicated deductions for self-employed individuals is the home office deduction. This allows you to deduct a portion of your bills in proportion to the size of your office. Keep a file with a copy of all of your utility bills in it, so that you can easily calculate your home office deduction at tax time.