2005 has come and gone, and it’s about time to worry about income taxes again. I had various 1099 income in 2005 from consulting, this blog, and freelancing activities. I’m very green to all of this self-employment stuff, so it’s all a bit overwhelming. Apparently, by default, I am in business as a sole proprietorship. Because I am running a business, I can get tax deductions from business expenses. This will help alleviate the 50% self-employment tax-bite I was pondering earlier. But my recordkeeping was so shabby I won’t get everything I could have. For example, I can deduct the cost of webhosting for this blog, but not any of the mileage driven to my consulting gigs.
I plan on being much more organized this year. For example, all mileage that I drive for freelancing will be logged carefully on a clipboard in my car. Also, I plan on opening business checking accounts to track self-employment income and business credit cards to track expenses.
By Jonathan Ping | Entrepreneurial | 1/10/06, 12:18am