Want to manage your small business expenses and tax deductions like a pro? 

We’re here to show you how—and make it easier than ever. When you’re running a small business, there’s already a lot to keep track of. Whether you’re tracking business expenses, mileage deductions or something else, we’ll walk you through the easiest ways to keep accurate records so you can: 

  • Grow your small business
  • Save on taxes with small business tax deductions 
  • Accurately understand your business expenses 
  • And more! 

Dive into the guide below, or jump to the section you need: 

Small Business Expenses 

What small business expenses are tax deductible?

There are so many tax-deductible business expenses! In short, an expense is tax deductible if: 

  • It’s an ordinary business expense for someone in your field of work, and 
  • It’s a necessary expense for your business 

Here’s the official IRS definition of a tax-deductible business expense: 

“An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.”

Small Business Expenses List 

So, what kinds of expenses are typically considered tax-deductible? Things like: 

  • Business insurance premiums 
  • Rent for office space 
  • Car and mileage deductions
  • Payroll and employee benefits 
  • Office supplies 
  • Advertising 
  • Business-related subscriptions 
  • Continuing education 
  • And more! 

To make sure you’re not missing out on any deductions, check out our full list of small business tax deductions ahead of your next tax deadline.

How to track expenses for small businesses

If you’re still collecting paper receipts, importing your bank data into Quickbooks or keeping a running tally in Excel because someone told you this was how you had to do it—we don’t blame you for looking for a better way. 

While those methods certainly get the job done, they also take a significant amount of time and effort on your part. With an app like Everlance, you can track business expenses easily, and even automatically! How? There’s two ways: 

  1. You can link your bank account or credit card(s) that you use for your business and Everlance will import expenses for you. 
  2. You can add business expenses manually as they occur. 

At first glance, adding business expenses manually might seem like just as much work as manually entering expense data into a spreadsheet. However, there’s a lot more flexibility to it. For example, with Everlance’s expense tracking, you can: 

  • Enter expenses for any date. This means that if you forgot an expense 3 months back, you can simply date it correctly and it slots right in.
  • Attach & store images of receipts to any expense. Date, time, title, description - it’s all there.
  • Keep IRS-compliant records, all in one place, right on your phone (and synced to your desktop). 

The power of manually entering business expenses has flexibility, but with so much going on for your small business, we’re guessing you’re looking for a way to save time wherever possible. When you link your business-related financial accounts, Everlance will automatically find all of your expenses and add them to your Everlance account with the correct date, time, amount & corresponding information. 

Why keep a shoebox full of receipts when you can simply snap a pic of the receipt and store it securely on the cloud forever? Why bother tracking expenses manually in Excel when you can let Everlance automatically pull all of your expense records for you? 

When expenses hit your bank account or credit card, they’ll instantly be imported to your Everlance account and viewable on the Everlance Dashboard

How to keep IRS-compliant records for small business expenses

Of course, simply maintaining an expense log is just step one. In order for that expense log to be able to help you, it needs to be: 

  • IRS-compliant (i.e. contain all the right information, like the date of the expense, who was paid, the amount paid, proof of payment, and a description that shows the amount was for a business expense
  • Easily-exported and contain clean records to use for tax purposes
  • Organized, with all of your expenses and records in one place. 

The Everlance Dashboard is a great way to track all of your small business expenses and tick all of the boxes above. How so? 

Everlance is IRS-compliant 

When you log in (via mobile or desktop), you can view snapshots alongside the full picture of your small business expenses. With expenses automatically imported—or input by you or another team member—you can easily see dates, amounts paid, receipts, and descriptions all in one place. 

Everlance reports make it easy to file taxes 

Whether you’re filing taxes yourself or handing your records off to an accountant or tax preparer, Everlance makes it easy to export records. When you’re logged into your Everlance account, you simply have to tap a button and your entire year of expense data (including mileage deductions, if you have them!) are exported to a .CSV format. 

Import this file directly into your tax software or hand it off to your preparer, and your taxes are that much easier. 

Everlance Dashboard syncs all of your accounts and expenses

Have multiple cards and accounts you use for business? 

Manage a few team members and need to track their expenses as well? 

Need to add notes or descriptions to your expenses to track which area of the business they’re for? 

With Everlance, all of this is easy. 

That way, you don’t have to manage multiple spreadsheets or worry about monitoring multiple accounts—just sync what you need to track to Everlance, and—like magic!—you’re done.

How to manage business expenses with a team

If you have multiple team members, you can easily manage expenses across your business with Everlance as well. An Everlance for Business account allows you to consolidate and manage multiple accounts, all from one dashboard. 

Not only does this make record-keeping way easier, it also helps make reimbursements to employees simple, and helps prevent employees “forgetting” to log expenses or mileage. You can also add or delete users at any time, meaning Everlance can easily scale as you do. 

Small Business Mileage 

Why should I track business mileage?

The best answer for this is very straightforward: tax deductions! As a small business owner you need every legal tax deduction you can get, right? Would you ignore $10,000 - $20,000 in tax deductions each year if you knew you could legally take them? Probably not. 

The more you drive for business and the more you spend, the more you save—it’s as simple as that, and a business mileage tracker like Everlance helps you keep track of all of it.

Small business mileage deduction 

Anyone who drives for work—whether your small business requires it or you’re just running business-related errands—and doesn’t get reimbursed for their mileage or gas by an employer is eligible for the mileage deduction. 

In order to qualify for the small business mileage deduction, you’ll need to keep track of your business mileage whenever you drive for work, ensuring your mileage records are IRS-compliant. Then simply deduct the mileage from your taxes. 

What are the best ways to track your business mileage? 

There’s a few different ways to track mileage for taxes: 

Tracking your mileage by hand—whether you’re using a pen-and-paper log or a digital tool—is straightforward, but it can be difficult to stay on top of and it’s easy to miss miles (and therefore, deductions). Using a mileage tracking app allows you to record mileage automatically and effortlessly. 

For example, Everlance is a mileage tracking app that uses GPS technology to automatically record your driving miles and allows you to classify them as business or personal to easily track business mileage throughout the year. You can even set up auto-classification rules to make things even easier. 

How to write off mileage for small businesses

So, once you’ve tracked your business mileage, how do you actually deduct it from your taxes? That’s easy! 

Simply multiply the total number of miles by the IRS reimbursement rate—currently 62.5 cents per mile for the second half of 2022—and then deduct that amount in the appropriate box on your tax return. 

For example, someone who drove 5,400 miles between July 1, 2022 and December 31, 2022 would be eligible to deduct $3,375 from their taxes for mileage. 

For more details on how to write-off tax deductions on your tax returns, check out our guide to self-employed taxes.

Best mileage tracking app for small business

While there’s a number of mileage tracking apps on the market, Everlance is the #1 rated mileage tracking app, and popular among small business owners and self-employed workers. Why? 

Let's take a look at how you track mileage with Everlance.

Each time you drive, Everlance automatically records your trip in the background using GPS for the most accurate, effortless way to record business mileage. You don’t even have to remember to start or stop your trips!

Then, Everlance automatically records all the details needed to keep your mileage logs IRS-compliant, such as: 

  • The date and time of each trip 
  • The starting and ending location 
  • The business purpose of the trip (which you can do when you classify the trip)

Once you’re done driving, you can easily swipe left or right to classify the trip as business or personal. You can then view the entire route on a map and see exactly how much the trip was worth.

Plus, Everlance offers both mileage and expense tracking, all in one app, making it easy to stay organized and keep track of all your business deductions in one place. At the end of the year, just export your reports, pass them off to your accountant or plug them into your tax preparation software, and you’re done!

Small Business Taxes

Taxes are already a pain for the average person—but when you have a small business to run, taxes can feel totally insurmountable. But don’t despair! There are a few things you can do to make your small business taxes a lot easier. 

Small Business Tax Guide 

Whether you’re just starting out as a small business owner or have had a small business for decades, hiring a professional—an accountant or tax preparer—can be a big help, and can help prevent audits. 

However, it’s still a good idea to understand how small business taxes work, and know what you need to keep track of throughout the year to prepare for them. 

If your small business is a one-man (or one-woman) show, you’ll file self-employed taxes. You can view our complete guide to self-employed taxes to brush up on what’s required. 

If your small business has employees, things get a bit more complicated. Check out the IRS guide to managing taxes for employees and small business taxes

When in doubt, know that you’ll have to pay (or account for) taxes on: 

  • Income tax 
  • Self-employment tax 
  • Employment tax (if applicable) 
  • Excise tax (if applicable) 

Small Business Tax Deductions 

When you add up all those taxes and realize you’re going to have to be paying 25-30% of your income in taxes, it can be a bit…distressing. But don’t panic! There’s a simple way to lower your tax bill as a small business—with tax deductions! 

Tax deductions can come in the form of standard business expenses (see more details above about that), mileage and other intangible expenses, or tax write-offs and tax breaks for small businesses, like the qualified business income deduction. 

To make sure you’re getting all of the deductions you’re eligible for, make sure to check out our full list of small business tax deductions

Ready to make small business taxes easier? 

Sign up for Everlance today (pro-tip: a premium subscription is—you guessed it!—tax-deductible) and track all of your mileage, expenses and other tax deductions all in one place. 

Automatic mileage tracking, effortless expense reporting: that’s Everlance! 

Download Everlance on iOS or Android, or get started on the web

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