The most common tax deductions for the self-employed include mileage for business driving, vehicle expenses like gas and repairs, cell phone and data use, supplies, home office expenses, insurance premiums, legal and professional services, advertising, and education expenses. Maximizing these deductions can reduce your taxable income significantly. To learn more, find our The Ultimate List of Self-Employed Tax Deductions

It's critical to keep thorough records of all business expenses you wish to deduct. For mileage deductions, you must maintain an accurate log of business miles driven. Save receipts for all individual deductible expenses. Organize records by category and date. Retain paperwork for at least 3 years in case of an audit. The IRS provides more detail in their Self-Employed Individuals Tax Center

The IRS requires taxpayers to keep tax records for at least 3 years after filing. To be safe in case of an audit, it's recommended to keep federal tax returns, mileage logs and expense documentation for 6 years or more after filing. Store records securely but accessibly in case needed to verify deductions. Everlance will maintain your trip logs for the life of your account.

Remember, the IRS understands it costs money to run a business. They are not interested in taxing your earnings, just your profits. In addition to mileage, any costs incurred to operate your business such as cell phone and data use, supplies like hot bags or blankets, parking and tolls, rideshare commission fees, cleaning, water, gum or mints, accounting services, car washes, and more could be considered tax deductible. We recommend consulting with a tax professional if you are unsure about a certain expense.

Yes, as a self-employed taxpayer you typically need to make quarterly estimated tax payments on your earnings, rather than just paying once annually. The IRS requires estimated payments if you expect to owe at least $1,000 in taxes when you file. Failure to pay can result in penalties.

Use the Everlance 1099 tax calculator, a free tool to estimate taxes throughout the year.

Most self-employed drivers file taxes as sole proprietors using Schedule C with Form 1040. Your profits pass through to your personal taxes. You can choose filing status as single, head of household, married filing jointly, or married filing separately.

Yes, the IRS offers a range of free online education resources to help self-employed taxpayers including webinars, videos, guides and tax preparation checklists in their Self-Employed Individuals Tax Center. There are also many free e-filing services for taxpayers earning under certain income thresholds.

To prove business vs. personal miles, you should keep a contemporaneous mileage log with date, trip purpose, and total miles for every business trip as well as total miles for the year. Lacking detailed records makes justification much harder if audited. We also recommend keeping GPS based logs to ensure each mile is accounted for

Yes, it's possible to get audited as the IRS may ask for verification of the deduction. Not keeping thorough mileage logs raises the chances of an audit. Maintaining detailed records provides necessary evidence to validate your deduction claims.

Independent contractors can deduct business expenses like mileage, supplies, fees on Schedule C. Small business owners can deduct those plus other costs like employee salaries, benefits, and rent on Form 1040 with Schedule C, E, or F.

Yes, fees paid for tax preparation, tax planning and advice, bookkeeping, payroll processing, accounting services, or any other software related to your self-employment are deductible business expenses. (This includes your Everlance subscription!)

Yes, apps like Everlance automatically track your mileage and provide detailed logs to simplify documentation of your deduction. This helps ensure every deductible mile is captured.

If you use your personal cell phone for business, you can deduct the percentage of use that is work-related. Keep a log to show your business vs. personal use.

Normal commuting mileage from your home to a regular place of work is not deductible. You also cannot deduct trips for personal errands in between business activities.

No, a separate credit card and bank account are not required for deducting business expenses. You can simply go through your bank account or credit account and designate which expenses are business related, and what %. We recommend linking your bank or credit card to your Everlance account to automatically provide you with your expense feed and use a simple swipe to designate whether it’s personal or business related. Everlance can even help you find potential deductions you may have missed with Instant Deduction Finder

The tax filing deadline for most individuals is April 15 of the following year for the previous tax year return. Failure to file on time can result in penalties, interest, and late fees.

Penalties for excessive deductions can include paying back the overstated refund plus interest, and additional fines based on the extent and nature of the violation. Severe cases can prompt criminal prosecution.

If you forgot to track miles, you can estimate using appointment logs, calendars, typical routes, and distance software to approximate unlogged business mileage. But estimates should be a last resort with detailed logs preferred.

Unfortunately meal expenses like snacks, coffee and drinks are generally not deductible while driving. Exceptions apply when away overnight on longer business trips.