Are you self employed? If you are, it is extremely important to keep track of your income and expenses for your business for many reasons. For now, let’s focus on organizing for income tax purposes.
It can seem confusing, but for most small businesses, those that work in direct sales, or provide services or products for a fee, you are considered self employed. If you carry inventory, you must also keep track of that.
Basically, if you use it or spend money for your business, it most likely would be considered a deductible expense. Yes, you should save all of your receipts from such purchases. However, you only need those in case of an IRS audit.
I am not an accountant, but I have an awesome one that not only helps me file taxes, she is able to answer all of my tax related questions. A good accountant is a valuable asset in my opinion.
Since I am in direct sales, and have two service based businesses, I am comfortable sharing what I have learned. The questions I get asked most are what items are tax-deductible. So I put together a very basic list of common expenses for these type of businesses. Scroll down and drop your e-mail address to receive a free copy!
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