Schedule C: Business Expense Records That Make Tax Time Easier

Separate business and personal activity

A dedicated business account and organized records make it easier to identify transactions and support reported income and expenses.

Track income consistently

Reconcile invoices, payment platform reports, cash receipts and bank deposits. Do not assume a 1099 is the only income that must be reported.

Common expense categories

Depending on the business, expenses may include advertising, supplies, insurance, professional fees, business-use telephone costs and vehicle expenses. Expenses generally must be ordinary and necessary, and personal portions are not deductible.

Vehicles and equipment need extra attention

Keep mileage logs, purchase dates, business-use percentages and cost records. Depreciation, Section 179 and other rules can apply; the best treatment depends on the facts.

Keep supporting records

Retain receipts, invoices, statements and documentation showing the business purpose of expenses. An organized year-round process is better than reconstructing records at filing time.