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Free Spreadsheet for Tracking Potential Freelancing/Blogging Deductions

Just want to download the spreadsheet? Click here.

Last week, I shared my 3 spreadsheet for bloggers and freelancers to track income. Keeping track of what you earn as you go along will be a huge help on tax day. It’s also important for your own month-to-month financial planning.

While not as critical as your income, knowing your deductions is another important part of preparing for tax day. If you leave these until the end of the year (and you’re anything like me), you’ll have a hard time remembering all your potential deductions and the proper dollar amounts. Even more importantly, you won’t have documentation. It’s much less of a headache to do it throughout the year instead of waiting until the last minute.

Tracking Deductions

My theory of tracking deductions is to log all potential deductions. All of them. That way when it comes time to do your taxes, you can have a professional help you figure out which deductions (if any) you can take. If you only go with “sure things,” or if you’re not familiar with the tax code, then you may end up paying more in taxes than you had to.

So if there’s even a chance that you can deduct it, log it. New computer? Tough to write that off entirely, but if you spend about 35% of your computer time doing blog-related activities, you might be able to deduct 35%. Or perhaps you paid for a subscription to help promote your blog. That may be deductible. You might as well write it all down, in case it is.

For your own use, tracking all freelance/blogging-related expenses helps you manage your business better. After all, if your spending is almost equal to your income, then you may need to rethink your spending. On the other hand, that could be just fine because you’re doing it all as a hobby and as long as it pays for itself, everything is ok.

A Spreadsheet to Help You Track Expenses

You can use anything to track your expenses—a ledger, a piece of notebook paper, a notepad file, or a Word document. My favorite method is using a spreadsheet. I like the look and I like that I can always shift things around or add up columns. It’s pretty simple to set up your own spreadsheet.

However, if you’d like to use mine, I’m making that available as well. It’s got a pretty simple layout with columns for the information I feel is necessary. Date — should match receipt, helps you organize. Price — so you know what to deduct (or where to start from if you’re deducting a percentage). Product — ok, what did you buy? Project — not necessary, but this may help you balance out blog vs. freelance or jog your memory on exactly why you spent that. Description — details on the product, perhaps estimates on how often you use it for work. The more detail you include, the better you and your adviser should be able to decide whether it’s a legitimate deduction.

Click here to download the expense-tracking spreadsheet.

If you don’t have Excel, you can still use the spreadsheets. Just download the free Open Office suite.

Saving Receipts

And save receipts. If your receipts are all digital, print them. If you don’t have a printer, you can probably print pretty cheaply at your local library. Having a spreadsheet to match them up with will save you time figuring out precisely what each receipt was for. Just make sure they have the date, at least (and that the date is on your spreadsheet), or add it yourself.

If you get audited, you will be very grateful for the spreadsheet and receipts. But having the spreadsheet and receipts should also lower your chances of being audited, since you should be reporting the right numbers.

I am not a tax professional. You probably aren’t either. That’s why I advise logging everything and then getting together with one at the end of the year to figure out which deductions you should take and which you shouldn’t.

{ 2 comments… read them below or add one }

Emma September 6, 2008 at 8:56 am

An alternative to printing out paper receipts is to print them to PDF and store them on your computer / external hard drive for backups.

You can download a free program, PDF995 (or pay the 9.95 if you get tired of seeing the pdf ad pop up each time you use it – still much cheaper than adobe writer), and when you hit print, select the PDF writer and then name it based on the receipt.

Personally, I prefer this option than printing out receipts – I will only ever print receipts if they are mandatory for something, otherwise, I print it to keep on hand for the “just in case” type of thing.

mrsmicah September 6, 2008 at 2:44 pm

Great point, Emma. I think some online receipts can even be downloaded in PDF form.

But if someone does buy the software—don’t forget to add it as a potential deduction! 😉

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