What records should I keep for tax purposes as a freelancer?

Okay, here's a breakdown of records you *must* keep for freelance/1099 tax purposes, as a US CPA. Organization is key!

**1. Income Records:**

* **Invoices:** Every invoice you send to a client. Include date, services provided, amount due. *Example: Invoice #123 to Acme Corp for $500 website design on 1/15/2024.*

* **Payment Proof:** Bank statements, PayPal/Venmo/Stripe records showing deposits from clients. Match these to your invoices.

* **1099-NEC Forms:** Clients who pay you $600 or more in a year *should* send you a 1099-NEC. Keep these with your records, but don’t rely *only* on them - you must report *all* income, even if no 1099 is received.

**2. Expense Records (Crucial for Deductions!):**

* **Business Bank Account/Credit Card Statements:** Dedicated accounts make tracking MUCH easier.

* **Receipts:** *Everything*. Keep receipts (physical or digital copies) for:

* **Home Office Deduction:** Mortgage/Rent, Utilities (portion used for business), property taxes (portion used for business). *Example: Electricity bill for $200, business use 20% = $40 deductible.*

* **Supplies:** Office supplies, software, website hosting, etc. *Example: $50 for Staples, $12/month for Adobe Creative Cloud.*

* **Business Travel:** Airfare, hotels, mileage (use the standard mileage rate - 67 cents/mile for 2024), meals (50% deductible). Keep detailed travel logs!

* **Education/Training:** Courses to improve skills related to your freelance work.

* **Health Insurance Premiums:** Self-employed health insurance is typically deductible.

* **Business Insurance:** Liability insurance, etc.

* **Mileage Log:** Track business miles driven. Include date, destination, business purpose, and mileage. Apps like MileIQ can help.

**3. Other Important Records:**

* **Contracts:** Agreements with clients.

* **Self-Employment Tax Calculations:** Keep records of estimated tax payments made (if applicable).

* **Retirement Contributions:** Records of contributions to SEP IRA, Solo 401(k), etc.

**Record Keeping Method:**

* **Digital is best:** Scan all receipts and invoices. Use cloud storage (Google Drive, Dropbox) or accounting software (QuickBooks Self-Employed, FreshBooks).

* **Retention:** Keep records for *at least* 3 years from when you filed your return (longer if you claim depreciation).

⚠️ Disclaimer: This is for educational purposes only. Always consult a licensed CPA for personalized advice.