Tracking Expenses as an Independent Contractor

Independent contractors often start their careers without much organization. Starting as a side gig or part-time job, these contractors often miss vital tax breaks because they don’t track their expenses properly.

It’s overwhelming to start tracking expenses and income, but the government will want its money.

You may miss vital tax deductions if you don’t track your expenses properly, and this leads to you having to pay the government more money. You’re losing money by not tracking expenses, and it’s easy to get all of your expense tracking in order with these apps:

1. Expensify

Expensify is a go-to app that helps you completely automate the entire expense reporting process. A partner of CPA.com, the platform will provide easy receipt scanning for reimbursement as well as:

• Integration to accounting apps
• Real-time tracking
• Full reporting

When it comes time to create an expense report, Expensify makes it as easy as possible for independent contractors.

2. Taxbot

Taxbot is a great platform to maximize your tax savings, and the company claims to have provided tax savings of over $1 billion to their users. It takes seconds to get started and just minutes to take advantage of the savings Taxbot has to offer.

You’ll have to pay $10 a month to use the platform, or $100 if you opt to pay for the entire year of usage upfront.

Taxbot is ideal for anyone that is working as an Uber driver or has become a Doordash driver. Why? You’ll be able to keep track of:

• Receipts
• Bank transactions
• Mileage

You can use your mobile phone or the internet to start using Taxbot. There’s also a yearly audit report, designed specifically for independent contractors, that can be used in the event that you’re hit with an audit by the IRS.

3. Intuit QuickBooks Self-Employed

Intuit’s QuickBooks has been a mainstay for small businesses for years, and the platform and app allow independent contractors to access tools that only larger businesses have had access to in the past.

The platform has tools that will:

• Track income
• Track expenses
• Pay employees
• Pay contractors
• Log mileage
• Create reports
• View transactions

Everything on the self-employed platform makes working as an independent contractor as easy and fluid as possible.

If you don’t want to use an app or plan on hiring an accountant to help you during tax season, you’ll need to make sure that you:

• Keep track of all expenses. This means tracking and maintaining receipts for everything, from services and supplies to equipment and mileage. Track everything and have proof on hand for your accountant.
• Stash money away for taxes, and this should be 25% to 30% of your earnings at a minimum. The goal is to have enough money come tax season to satisfy your tax bill.
• Pay taxes quarterly or risk having to pay a small fine for not paying your taxes on time.

If you plan on doing your own taxes, you’ll need to make sure that you research the deductions that you qualify for each year. Laws change, and there’s a chance that deductions are added, altered or removed during a given tax year.