by Paul Koullick
As a solo-entrepeneur, you’re juggling a lot of balls at once — sometimes flaming torches — and so expense tracking often falls between the cracks. It isn’t until April 14th at 11 pm that you really start kicking yourself because “I’m sure I’m forgetting something!”. At Keeper, we’ve helped thousands of freelancers through tax time, and we’ve seen some patterns. Last tax season, Keeper ran a study to discover the most often missed tax write offs.
The resulting list, below, represents the tax write offs that are most often forgotten. The smart thing to do is to keep track of during the year, so that when tax time comes around, you’re not giving Uncle Sam more than he deserves.
Uber / Lyft rides on the way to a work event are considered tax deductible transportation expenses. Unfortunately, since these services offer no physical receipts, it can be difficult to keep track of them during the year. At tax time, remembering whether a particular ride 8 months ago was work-related is near-impossible. That’s why marking trips down when they happen is critical and will save you a huge headache at the end of the year.
Like rideshare trips, digital purchases often don’t leave a paper trail. That means it can be hard to keep track of them. Whether it’s buying a stock photo, paying for a domain hosting software, or other work-related software purchase, it’s important to keep track of it so that you can get a discount at tax time!
New phone or computer
With the pace of technology updates, most people buy new electronics every year. Whether it’s a phone upgrade or a new laptop, these are large expenses that are also easy to forget about at tax time. Think about it this way: by remembering to claim it on your taxes, you’re effectively getting a 30% discount. That’s a lot!
Home office expenses
Many solo-preneurs work from home but forget to claim the home office deduction. You don’t need a separate room in your home to claim this massive tax deduction. Also, it’s important to record actual home expenses rather than just relying on the “standard” square footage method. The vast majority of solo-entrepreneurs will save more on taxes by claiming actual home expenses.
You don’t need to be eating filet mignon at a white tablecloth restaurant in order for a meal to be considered a “business” meal. As long as you discuss work and learn something valuable for your work, you can write it off on taxes. Over the course of a year, it really adds up!
Miscellaneous car expenses
When it comes to getting money back on your car expenses, there are two options: you can track miles, or you can add up your actual car expenses. If you don’t already have a mileage tracking habit, the easiest thing to do is to just track miscellaneous car expenses and then go back and add in gas expenses at the end of the year. Maintenance, registration, parking, tolls, and so on are all tax deductible expenses!
Paul is the co-founder and CEO of Keeper, a service which automates expense tracking for solopreneurs. In his free time, he loves running marathons, and spending time with his family in San Francisco.
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One Reply to “6 expenses solopreneurs should track for taxes”
You really should explain more about deducting meals in that you cannot apportion the bill to each guest and still get the deduction. Also, under the new rules if entertainment is present (like at a piano bar or sporting event) the deduction is questionable at best.