How To Track Business Expenses As A Mom-preneur

Are you a mom thinking of starting a small side hustle? Or perhaps you have plans to build a large business empire? There are many perks to earning your own income such as being able to set your own rates and work around commitments. One of the best perks is being able to reduce your tax by deducting business expenses. This can give you more money to take home for yourself and to spend on you and your family.

Of course, in order to deduct expenses from your tax bill, you need to keep track of all business expenses. Traditionally, this used to mean having to collect receipts and then manually add these all up. Nowadays, expense tracking is much easier thanks to card payments and digital technology. Below are some tips on how you can track expenses as a mom-preneur. 

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Open a business bank account

Separating your business and personal expenses into different accounts is one effective way to track your expenses. By making sure that all business-related expenses are paid out of your business bank account, you can then use your bank statement as a record of all expenses related to your business.

Many banks offer bank accounts specifically for businesses. These bank accounts sometimes come with extra fees, but have benefits such as generous overdrafts and the ability to access business loans. Make sure you take the time to compare the best business bank accounts.

Use a corporate card for expenses

When paying any business expenses, using a corporate card ensures that every expense is digitally tracked. You can take out corporate debit cards and corporate credit cards, and it’s possible to apply for multiple corporate cards to give out to each of your employees (if you’re planning to take on staff). 

Some corporate cards come with other perks such as rewards and discounts to certain services. These perks are worth looking into as they can save you additional money. There are a variety of corporate cards out there that you can choose from. You can research more into corporate card management online. 

Automate expense tracking with bookkeeping software

Downloading bookkeeping software can help you to track all your expenses and work out how much tax you owe. Such applications can be accessed on a computer or on a smartphone, and they can be linked up to your business bank account to record each expense in real time. By categorizing certain expenses using this software, you can also use this software to automatically calculate all tax deductions for you, so you know exactly how much to deduct from your tax when you go to do your tax return.

Take your time to compare different accounting software options. Many popular accounting software applications come with different plans – including a cheap basic plan for small businesses. This basic plan will usually always come with an expense tracking feature. Make sure to consider other features like invoice generation, financial forecasting and payroll functions (if you’re hiring staff).

Track your mileage

If you have to drive for work reasons, it’s also important to consider mileage claims. This involves tracking the time, miles, place and purpose of each work trip in order to make further deductions to your tax bill.

Mileage tracking apps exist that can help you to easily track all of this and calculate the tax deductions for you. These apps are worth looking into to help take the effort out of mileage tracking. If you have employees that use business vehicles, make sure that they also have these apps installed. 

Don’t overlook home office costs

If you work from a home office, it may be possible to deduct certain home expenses from your tax bill. This includes being able to deduct a percentage of your rent/mortgage, energy bills, insurance and home maintenance. Any equipment you use for business purposes – such as a laptop or phone – may also be tax deductible.

There are various different ways of deducting home office expenses. You can deduct a percentage of each of your bills based on the percentage of home space used as an office. Another simpler method involves subtracting $5 per square ft of home used as a home office. This guide offers more information on expense tracking regarding business use of home. 

Conclusion

By using these expense tracking methods, you can easily make deductions to your tax bill. Just make sure that you take the time to shop around when choosing business bank accounts, corporate cards, accounting software and mileage tracking apps.