Bookkeeping guide
Other small business tax bookkeeping: categories to review
Any other self-employed work. If you got a 1099 for this work, here are common categories and review questions; your facts and records determine what qualifies.
Worth knowing
These are common expenses people in this line of work may need to review. Anything marked in orange is an edge case worth raising with a preparer rather than assuming.
Records & business vs. personal
Use a separate bank account or card for business money when you can, and keep receipts, invoices, and statements that show the amount and business purpose. Personal and family costs aren't business expenses; for something used both ways, such as a phone, record only the business-use share. Money you take for yourself is an owner draw, not wages or a business expense. Report all business income whether or not a Form 1099 arrives. The IRS generally says to keep supporting records for 3 years from the date you file that return — longer in some cases.
3+ years keep records
Self-employment tax & estimated payments
Net earnings from self-employment of $400 or more generally require Schedule SE; other filing rules can apply below $400. Self-employment income usually isn't subject to withholding, so you may need to make estimated tax payments during the year (Form 1040-ES); late or too-small payments can bring an underpayment penalty. Whether you must pay depends on your expected tax, withholding, and prior-year tax, so check the Form 1040-ES tests and exceptions. For a Schedule C business, the Tax planner on the Tax-ready page follows that worksheet with the facts you enter — a federal planning estimate to confirm with your preparer.
$400 or more Schedule SE
Business mileage
Driving from one workplace to another, to visit clients or customers, or to a business meeting away from your regular workplace may be business mileage. Trips from home can be commuting, such as travel between home and your regular place of work, though a home office that is your principal place of business can change that. Keep a timely log of date, destination, business purpose, and mileage. If you use the standard rate, don't also deduct that car's gas, repairs, insurance, registration, lease payments, or depreciation; business parking and tolls can still be recorded separately.
$0.70 / mile 2025 rate
Home office
A space used regularly and exclusively for the business — for example, as your principal place of business or where you meet clients or customers — may qualify for the home-office deduction. PrivateBooks' simplified-method helper uses $5 per square foot, capped at 300 square feet; don't also book the same space's rent and utilities as Schedule C expenses. The deduction can be limited when business income is low, and eligibility depends on your facts, so confirm it with your preparer.
$5 / sq ft simplified
Paying helpers: contractor or employee?
Whether someone you pay is an independent contractor or an employee depends on the facts, such as whether you control only the result or also how the work is done (see IRS Pub. 15-A); misclassifying an employee can create employment-tax liability plus a penalty. Get a Form W-9 before paying a contractor. For 2025, Form 1099-NEC is generally required for each person you paid $600 or more for services in your business (card and payment-app payments can follow different rules), and Schedule C asks whether you made payments requiring Forms 1099. Confirm worker status with your preparer.
W-9 first before paying
Bigger purchases (equipment, computers)
Everyday supplies are generally current expenses. If something you buy for the business is expected to last more than a year, such as a computer, machine, or furniture, you generally can't deduct the entire cost at once as an ordinary expense; it may need to be depreciated, or may qualify for Section 179 or a de minimis safe-harbor election. Count only the business-use share. PrivateBooks does not calculate depreciation; a Line 13 amount should come from your preparer or a completed Form 4562.
at tax time big items
Business or hobby?
Schedule C is for an activity whose primary purpose is income or profit and that you carry on with continuity and regularity; a sporadic activity or a hobby doesn't qualify. Income from a nonbusiness activity is generally still reported, but on Schedule 1 rather than Schedule C, and the deductions you can take are limited — you generally can't use a loss from it to offset other income. The answer depends on your facts, so confirm with your preparer.
profit motive facts decide
Common categories PrivateBooks suggests
Pick Other small business during guided setup and PrivateBooks shows these categories mapped to Schedule C lines for review — no chart of accounts to invent. The mapping does not establish eligibility, business-use share, or substantiation:
| Category | Schedule C line |
|---|---|
| Sales & client payments | Line 1 — Gross receipts or sales |
| Supplies & small tools | Line 22 — Supplies |
| Office supplies (paper, ink) | Line 18 — Office expense |
| Advertising & marketing | Line 8 — Advertising |
| Website & software subscriptions | Line 27b — Other (software & subscriptions) |
| Phone & internet (work %) | Line 27b — Other (phone & internet) |
| Business insurance (not health) | Line 15 — Insurance (other than health) |
| Accountant & legal help | Line 17 — Legal and professional services |
| Hired help (independent contractors) | Line 11 — Contract labor |
| Card & payment processing fees | Line 27b — Other (bank & merchant fees) |
| Licenses & permits | Line 23 — Taxes and licenses |
| Business travel (overnight trips) | Line 24a — Travel |
| Business parking & tolls | Line 9 — Car and truck expenses (business parking and tolls) |
| Meals with clients or on business trips | Line 24b — Deductible meals |
Merchants it recognises automatically
On top of the 584 built-in sorting rules, this pack adds rules for Bluehost, Dreamhost, Freshbooks, Hostinger. A matching description gets a suggested bookkeeping category; anything uncertain goes to Review instead of being guessed at. Spot-check every suggestion: a merchant match is not proof of business use, eligibility, allocation, or substantiation.
Do you even have to file?
Net earnings from self-employment of $400 or more generally require Schedule SE, but other filing rules can apply below $400. Whether you received a 1099, also have W-2 wages, had withholding, or need estimated payments depends on the full return. Review the official Schedule SE instructions or ask a qualified preparer instead of treating this bookkeeping guide as a filing decision.
See an optional cash-reserve illustration →
Educational pointers, not tax advice. Tax rules change and your situation is specific — worth asking about at tax time. The free IRS-sponsored VITA program helps people under its income threshold at no cost.