[Track] Tracking self-employment expenses to maximize deductions at tax time

Stephanie ElliotStephanie Elliot Posts: 49Expensify Team Expensify Success Coach
edited April 23 in Deep Dives

Are you using Expensify to track deductions for tax time? Whether you’ve been tracking your expenses or are just catching up with a pile of receipts, calculating deductions is simple! Using your expense categories, you can easily generate totals to complete the IRS Schedule C (Form 1040).

Select “Track” in the Inbox

If you’re self-employed and using Expensify to track your expenses, you’ll want to select Track in the Inbox. Selecting the Track plan will automatically populate your account with expense categories that match up with the IRS Schedule C which you can then apply to your expenses. Filing your taxes will be as simple as viewing the list of category totals and plugging them into your favorite tax software, or right into the Schedule C!

Categorize Expenses

Since your expense categories match the Schedule C, you’ll want to make sure you’re categorizing each expense accurately so that it is included in the correct total for reporting. Luckily there are quite a few ways to make categorizing those expenses quick and easy:

  • Automatic Categorization: Did you know that Expensify can categorize your expenses for you automatically? Expensify uses the concept of implicit categories (think "sticky" categories), so each time you categorize a merchant, the system will remember that category and automatically apply it next time the same merchant comes up again. If you’ve connected your credit card to Expensify, you’ll also be able to set up Default Categorization for imported card expenses based on the expense Merchant Category Code (MCC).
  • Expense Rules: You can create an Expense Rule in your account to categorize or tag expenses based on the merchant name on the expense. Heads up, you can create as many expense rules as you’d like!
  • Manual Categorization: You can choose or modify the category of any unreported or open expense right on the expense!

Top Tip: Use Tags to differentiate between business and personal spend! This can be especially helpful if you’ve imported a credit card that you use for both expense types. You can set up a personal tag and a business tag under Settings > Policies > [individual policy name] > Tags so that you can label any expense as a business or personal expense!

Generate Totals

Once your expenses have been properly categorized, visit the Expenses page on your web account to generate a total for each category. Here’s how:

  • Click the pie chart icon in the upper right corner to go to the Analytics view
  • Enter in the dates you want to generate totals for
  • Scroll down below the pie chart to view the expense total for the given date range in each Category
  • Plug those numbers right into the IRS Schedule C (Form 1040)!

Heads up, if you want to double-check the expenses in any Category just click the three lines in the View Raw Data column to go right to that list of expenses!

Troubleshooting and FAQ

  • Did you select a different plan in the Inbox? Keep in mind you can always go back and select Track.
  • Do you need to add additional categories, or edit your existing categories? You can find instructions here.
  • If you need to share your expenses with an accountant, check out this guide on exporting expenses to CSV.

If you want to learn more about how you can use Expensify to track your business spend, organize and label expenses, and generate totals for end-of-year reporting, check out the Self Employed Webinar - you can view a pre-recorded session here!

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