Self Employment and Your Taxes
Updated: Oct 13
Starting your own business is exciting! Keeping good records from the beginning will make tax time much easier and help ensure you're claiming the deductions you're entitled to.
1. Business Income
Keep track of all money your business receives, including:
Cash, checks, credit cards, Venmo, PayPal, Square, etc.
Payments from customers or clients
1099 forms received
Refunds or other business income
Remember: All business income must be reported, even if you don't receive a 1099.
2. Business Expenses
Save receipts and track expenses such as:
Office supplies and equipment
Tools and materials
Advertising, website and business cards
Business insurance and licenses
Phone and internet (business portion)
Software and subscriptions
Professional fees (accounting, legal, etc.)
Rent and utilities
Business-related education and training
Payments to subcontractors
This form asks for both the total income and total expenses in all the categories that are reported on your tax return.
Small Business owners may also claim mileage. Keep a mileage log with dates, destinations, business purposes, and miles driven. Add a total miles count to your return if this applies to you.
Note: Driving from home to your regular workplace is generally commuting, not deductible business mileage.
Small Business owners may also include an office-in-home deduction if they have one space in their home that is dedicated to their business. For this deduction, your tax preparer will need the square footage of your whole home and the square footage of your used office space.
Helpful Tips & Important Reminders
Keep business and personal finances separate. Consider opening a dedicated business bank account.
Use bookkeeping software or a simple spreadsheet to track income and expenses monthly.
Save receipts, bank statements, and credit card statements. Digital copies are fine.
Track money you personally contribute to or withdraw from your business.
Keep records of business loans, payments, and inventory (if applicable).
Set aside money for income and self-employment taxes. You may need to make quarterly estimated payments.
Check whether Wisconsin sales tax applies to your business.
Remember, not every business purchase is automatically tax deductible.
Contact your tax preparer before making major purchases, hiring employees, or changing your business structure.
While your tax preparer only needs your year-end totals, you can use the form below to help track your income and expenses during the year. This full document is not needed for your taxes; it is for your personal use.
Business Tax Record Book
The Internal Revenue Service and the Small Business Administration both have excellent resources for small business owners and sub-contractors.
Internal Revenue Service Small Business and Self-Employed Center
Small Business Administration
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