FREE Self-Employment Ledger Template To Track Business Income and Expenses

Min Read

Tom Smery

A self-employment ledger form is an accurate, detailed record or document of your self-employment income and expenses. A self-employment ledger can be kept online via a spreadsheet, a document from an accounting software program, or even on a handwritten records book or spreadheet. Pretty much anything that you can use to record all self-employment income and expenses.

The most important thing a self-employment ledger does is keep accurate and up-to-date records of your income for your taxes.

In this article, we'll give you a free template and show you how to do proper self-employment ledger documentation. First, download our free self-employment ledger template below.

Note: If you want to manage invoices, contracts, business expenses, calculate your taxes, and create a business bank account instantly, try Bonsai. In other words, Bonsai is a sole proprietors dream. We'll take the headache away from tracking your self-employed income and expenses as well as make running your business a lot easier. Try a 14-day free trial today.

What To Track With A Self-Employment Ledger

You'll fill out the self-employment ledger documentation form with all the necessary financial records and bookkeeping information for your taxes. You'll record income and expenses with:

  • Date: when the expense or payment was received.
  • Amount: how much you received or paid for the expense or invoice.
  • Reason: the intent for why you made the purchase.
  • Category expense: the business deductible type for the expense.
  • Service/product: how you earned the income and who the client is if it’s an invoice). You'll write down the provider (if it’s an expense).

Download Our Self-Employment Ledger Template For Free

You must properly record your expenses and income from self-employment in order to pay taxes on your earnings at the end of the year. You'll report your self-employment income (or loss) on Schedule C or Form 1040 from any business you operated as a sole proprietor in which you ran for profit.

Make a copy of this spreadsheet file and download your free self-employment ledger template form.

How To Use Our Self-Employment Ledger Form

Now that you've made a copy and downloaded our self-employment ledger template, we'll walk you through the steps on how to use it.  Later in the article, we'll show you a neat way to create a self employment ledger automatically with a software.

Add Your Self-Employment Income

Income is all the revenue that comes into your business, such as profits from products or services sold. You'd want to record your gross income or who paid you and the reason why they sent you money. For instance, if you were brought out on for a graphic design job, you'd write down details like the client's name or who made the payment, how much they paid you, if the job was for a logo or a website design, the date and upload the invoice.

If you freelanced with clients, you'll most likely receive a 1099 form. A 1099 form proves your wages and taxes as a self-employed individual. Add the information from your 1099 on your self-employment ledger documentation form. Use our free calculator to help you know how much self-employment taxes you'll need to pay.

Track Your Expenses

On the spreadsheet, you'll want to write down the cost of all your business expenses or what you spent money on to run your operation. For tax purposes, include details for why you purchased it for business. The IRS requires those expenses to be “ordinary” and “necessary” to your business in order to qualify as a tax deduction. Discover a list of 1099 deductions here.

Many folks use online apps and or accounting services to track expenses and income.

You'll need to keep accounts of your expenses for at least 7 years after you file.

How To Track Your Expenses With Bonsai Tax

Bonsai Tax is an expense management software which scans your bank/credit card statements to automatically discover potential tax deductions. The app would categorize each expense for you but you could also manually change the categories.

Step 1: Scan your receipts

You could use our software to neatly organize all your expenses in a downloadable spreadsheet.  Simply take a photo of your work-related receipts right in the Bonsai Tax app. You could easily download the sheet and send it to your accountant or whomever helps you with tax filing.

Step 2: Upload pictures of your receipts

The IRS accepts digital forms of receipts as proof of expenses. So, if you tend to lose papers or receipts, you are in luck. With the Bonsai Tax app, you can snap photos of your loose receipts with your smartphone and simply upload them on the software.

Step 3: Create, send and track invoices

With the Bonsai app, you can generate your invoices and receive payments with your account. You'll be able to seamlessly create invoices by using our templates and store them with your self-employment ledger document. With Bonsai Payments you'll be able to receive funds and get paid faster. Not to mention, with an account, you'll get access to templates for contracts and proposals in one place.

Claim your 14-day free trial here.

Generate A Self-employment Ledger Automatically Using Bonsai

If you don't want to record/calculate all your income and expenses, then use Bonsai to automatically do it for you. Our business expense tracker, Bonsai Tax is super easy to use. Our app would scan your bank statements to discover potential tax deducitons you can claim from your tax bill. The process of tracking your business write-offs does not have to be hard.

Our new freelancer business bank account, Bonsai Cash, can help you separate your business expenses from your personal ones. If you don't have a business checking account, it would be hard to prove personal expenses from business ones if you ever get audited.

Bonsai allows you to generate invoices, upload pictures of your receipts and manage all your expenses for taxes. After you input all your information onto your account, you can generate an Income and Expense Report when you file taxes. Put simply, it's the easy way to run your self-employed business.

Self-Employment Ledger Example

Here's an example of a filled out self-employment ledger documentation form. Again, you can make this whole process easy with Bonsai.

Why You Should Use A Self-Employment Ledger

A self-employment ledger provides a ton of benefits for financial or money management. Let's review some of the reasons why you should keep a ledger.

  • Tax benefits: Let's face it. Taxes are a pain. However, by keeping an organized record of your expenses with a self-employment ledger document, you'll be able to reduce your taxable income and lower your tax bill. You can always opt to use an app to track your business write-offs like Bonsai Tax if manually recording information becomes too time-consuming. In fact, users typically save on average of $5,600 with our software. Claim your 14-day free trial today. Bonsai could make filing your taxes a lot easier.
  • Better financial planning: by having organized records of your expense and income, you'll get a clear picture of where your business finances stands. Accurate record-keeping as a freelancer is important so you’ll need to know exactly how much money you’re earning a month and how much you’re spending. A self-employment ledger can help you better manage and forecast your future finances.
  • Access to loans: an accurate self-employed ledger can act as a proof of income for loans. A  summary of your expenses and income document can show your net income and let lenders know exactly how much you are making after your expenses. If you are also applying for health insurance, a self-employment ledger can help you report your income accurately.

Note: If you want to manage all of your invoices, receive payments, track your tax deductions and open an online business bank account in one place, try Bonsai. Bonsai has all the tools you need to run your freelance or self-employed business. Self-employed individuals love our accounting software because they save on average of $5,600 from their tax bill. Try a 14-day free trial today.

Keep Your Self-Employment Ledger Documentation Accurate!

It is vitally important to constantly update your self-employment template and check it for accuracy. Proper bookkeeping goes a long way if you ever get into trouble with the IRS. Creating a self-employment ledger that is up to date and accurate is a must for it to be useful.

Self-employed individuals with inaccurate self-employment ledgers could result in tax penalties and interest charges when they file.

So keep in mind, self-employment ledgers are only effective if they are kept up to date and correct. If a self-employment ledger is correct, most institutions would accept it as proof of income.

The best way to keep an accurate self-employment ledger, is to use a software like Bonsai to digitally track everything for your taxes. Our app allows you to manage your invoices, contracts, business write-offs and proposals in one place. Try a test run of Bonsai today and see for yourself.

We hope this article provided you with everything you need to know for how to use a self-employment ledger documentation form as well as the benefits you'd receive when you create one.

Tom Smery
Tom Smery is a certified CPA for over a decade. In his free time, he writes articles to pass on his expert knowledge on taxes and accounting. Thomas has a wide range of deep knowledge on 1099 taxes, and finance topics. You can find him fishing when he is not preparing taxes for his clients or writing about accounting.

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