Independent contractors managing self-employed taxes should stay proactive about independent contractor deductions and year-round recordkeeping.
Why It Matters for Self-Employed Taxes
Families often pay via multiple methods. Without a ledger, you might under report income or miss deductible mileage tied to appointments.
Key Earnings & Expense Buckets
- Deduct activity supplies, lesson plans, and educational materials purchased for clients.
- Track mileage to schools, appointments, and household errands handled on the client’s behalf.
- Record continuing education courses, CPR renewals, and background checks required by families.
Weekly Workflow
- Log hours and pay received after every shift, noting cash, Venmo, or payroll deposits.
- Store signed contracts and care plans securely with renewal dates.
- Review state household worker rules if a family transitions you to W-2 employment.
Tools & Next Steps
- Caregiver scheduling apps like Homebase to track shifts and pay.
- Expense trackers for mileage and supplies dedicated to each household.
- Secure document storage for medical authorizations and emergency contacts.
Accurate records make conversations about raises, renewals, and taxes straightforward and professional.
How do I track mileage for gig work in 2025?
Use IRS-approved mileage logs or apps like Everlance to document date, distance, and purpose for every self-employed trip.
Can I deduct equipment or vehicle lease payments?
Yes, deduct the portion tied to independent contractor work; keep receipts and lease statements for 1099 tax audits.
When should I pay quarterly estimated taxes?
Send payments by April, June, September, and January to cover self-employed taxes and avoid IRS penalties.
What records should independent contractors keep?
Maintain income statements, mileage reports, receipts, and bank deposits to support deductions and 1099 filings.
How can I reduce surprise tax bills as a freelancer?
Estimate your independent contractor deductions monthly, set aside 25-30% of income, and automate transfers to a tax savings account.