Independent Contractors & Gig Worker Tips

Tips to help Independent Contractors and Gig Workers navigate their bookkeeping and tax preparation

Stephany Pruitt, MBA

12/29/20242 min read

Freelancers and gig workers often juggle multiple clients and projects, leaving little time to manage their finances. However, effective bookkeeping is essential to maximize earnings, track expenses, and stay prepared for tax season. Here are some practical tips to help you keep more of what you earn.

Track Every Payment

Freelancers often receive payments from multiple sources, which can make income tracking complicated. Keep a detailed record of all payments, including dates, amounts, and client details.

Tip: Use invoicing software to track payments automatically and stay on top of outstanding invoices.

Separate Personal and Business Finances

Mixing personal and business expenses can create confusion and make it harder to claim deductions. Open a dedicated bank account for your freelance income and expenses.

Tip: Use a separate credit card for business purchases to streamline expense tracking.

Record Expenses in Real Time

It’s easy to forget about expenses if you don’t record them immediately. Keep receipts for everything from office supplies to travel expenses and log them regularly.

Tip: Use apps like Expensify or QuickBooks Self-Employed to simplify expense tracking.

Don’t Overlook Deductions

Freelancers are eligible for numerous tax deductions, including home office expenses, equipment, internet bills, and mileage for business travel. Track these carefully to reduce your taxable income.

Tip: Keep detailed records and consult a tax professional to ensure you don’t miss out on deductions.

Set Aside Money for Taxes

As a freelancer, taxes aren’t withheld from your income. To avoid surprises during tax season, set aside 25-30% of your income for taxes.

Tip: Make quarterly estimated tax payments to stay compliant and avoid penalties.

Use Bookkeeping Software

Manual record-keeping is time-consuming and prone to errors. Invest in bookkeeping software tailored to freelancers to automate income and expense tracking.

Tip: Choose software that integrates with your bank account for seamless updates.

Hire a Professional When Needed

As your freelance business grows, bookkeeping can become overwhelming. A professional bookkeeper can save you time, ensure accuracy, and help you focus on your work.

Tip: Look for a bookkeeper with experience working with freelancers.

Good bookkeeping is the foundation of a successful freelance career. By staying organized, tracking expenses, and planning for taxes, you can maximize your earnings and reduce financial stress. If you need help managing your finances, our bookkeeping services are here to support you.