Track Expenses
Track Expenses
Track expenses to make tax deductions a breeze
TL;DR: Freelancers, independent contractors, sole proprietors, side hustlers, and small business owners - rejoice! New Expensify’s expense tracking feature makes recording business spend, categorizing expenses, and maximizing tax deductions effortless.
April showers bring… tax season. And for sole proprietors, small business owners, and other self-employed professionals, understanding and organizing expenses can be the difference between a serene tax season or a frantic one. With proper expense tracking, tax deductions are a powerful financial tool and one you should take advantage of.
Whether you manage the finances of a small business, work independently, or launch ventures from your basement, the principles of expense tracking remain the same. Scanning receipts, categorizing spending, and meticulous record-keeping are more than just chores; they’re the stepping stones towards maximizing your tax return.
What is expense tracking?
Expense tracking is the process of recording and categorizing different types of business expenses for tax purposes. This systematic approach to organizing business spend also provides a realtime snapshot of your financial landscape and can help identify trends, optimize budgets, and forecast finances more accurately.
The process to track expenses is pretty straightforward:
Keep all receipts and invoices related to your business transactions.
Note the purpose of each expense to ensure it qualifies for tax deductions.
Regularly update your financial records with these details.
Expense tracking benefits
Tracking expenses – especially with a robust expense tracking tool like Expensify – can provide valuable insights into your financial health and make tax season smoother. Expense tracking can also help "audit-proof" your business by making it super easy to keep your business expenses organized and separate from your personal spend.
Here’s a more comprehensive list of benefits:
Tax time triumph: Tax season doesn’t always come bearing good news. More often than not, it's usually because of unmanaged or untracked expenses. Expense tracking simplifies this by providing a clear view of all expenses, and having a detailed expense report means you can readily maximize tax deductions and any liabilities.
Uncover money leaks: If you’re ever wondering, “Where did my money go?” You likely have money leaks. You can identify areas where you’re overspending by meticulously tracking every expense and making suitable adjustments to your budget.
Categorizing personal and business expenses: Business decisions can be tricky for sole proprietors or small business owners. Keeping precise records of personal and professional expenses can help optimize business costs, streamline operations, and avoid any confusion in the long run.
Long-term profitability: All those tracked expenses can ultimately become a powerful data weapon. A transparent breakdown of your business spend helps identify areas for even more cost savings, leading to a significant amount in the long run that supports a solid financial strategy.
Features of Expensify’s expense tracking solution
Keeping track of business expenses is crucial for maximizing tax deductions, and Expensify is a tool that simplifies this process. Suitable for individuals and businesses alike, it's an excellent choice for those wanting to manage their finances more efficiently.
Scan receipts
Snap a photo of any receipt with the Expensify app, and SmartScan automatically captures all the details for safe keeping.
Log mileage
Hitting the road for work? Just enter your start/stop addresses and Expensify creates a beautiful map of your mileage, complete with the current IRS rate.
Add amounts manually
If you don’t have a receipt handy, it’s super easy to add any expense amount (in any currency) in a couple taps.
Categorize expenses
Add a default or custom category to every expense, then Expensify auto-categorizes from there to make tax season even smoother.
Invite your accountant
Add your accountant to Expensify, share detailed expense data in realtime throughout the year, and collaborate via chat in the same place. No more endless back-and-forth emails.
FAQs
-
To track expenses for tax deductions, consistency is key. You can manually record purchases in a spreadsheet or use a business expense tracker app to categorize and store receipts digitally.
-
For the self-employed, various options range from Excel spreadsheets to automated expense tracking apps and software. The key is choosing an option that fits individual needs and managing expenses as easily as possible.
-
The best way to track business expenses is to use a business expense tracker app that captures expenses in realtime, categorizes them, and integrates with accounting software for seamless tax preparation.
-
Absolutely! A thorough record of a tracker's business expenses can maximize your tax refunds by ensuring all deductible expenses are accounted for and verified.
-
Maintaining an expense tracker helps you stay organized, prevents missed deductions, and can make the tax filing process much smoother. Plus, it's useful for budgeting and financial planning year-round, no matter what you plan to spend your money on.
-
The 50/30/20 rule is a budgeting strategy that suggests allocating 50% of your income to needs such as rent, 30% to wants such as entertainment, and 20% towards savings.
New Expensify has everything you need to track and manage expenses, whether you’re an independent contractor, sole proprietor, or small business owner. So make your tax season enjoyable (for once!) and track your expenses in the app that does it all.
Give New Expensify a try today!
Ready to get started? Enter your information below, and we’ll take it from there.
Features
Learn more
Get Started
