Keeping Records When You Are Self-Employed
Good records do not need to be complicated. They need to be consistent. These habits make preparing a return much easier.
Separate business from personal
Use a separate bank account and card for business income and expenses if you can. It makes everything easier to sort, and it makes it clearer what belongs to the business.
Record income as it arrives
Keep a simple list of what you were paid, by whom and when, including income that did not arrive with a form.
Keep receipts and notes
Save receipts for business purchases, and add a short note about why. A photo is often enough, but keep it somewhere you can find it.
Set a regular time
Ten minutes a week is easier than a weekend in March. Pick a regular time to update your records.
Ask before you guess
If you are unsure whether something counts as a business expense, keep the receipt and ask your preparer. The rules differ by situation and change over time.
Keep your records
Ask your preparer how long to keep records for your situation, and keep them in an organized place.
Need help getting started? See individual tax preparation or get in touch.