5 Common Tax Mistakes Independent Contractors Make with the IRS (And How to Avoid Them)

Working for yourself in the US offers great flexibility, but simple bookkeeping mistakes can cost you hundreds of dollars at tax time. Here are five errors to avoid:

1. Forgetting to track mileage: Every business mile driven reduces your taxable income. Always use a mileage tracking app from the moment you go online to accept rides or deliveries.
2. Mixing personal and business funds: Using one bank account for everything makes it hard to prove business expenses during an audit.
3. Ignoring state taxes: Alongside federal IRS taxes, most US states require their own income tax filing.
4. Overlooking small deductions: Phone mounts, insulated delivery bags, car washes, and a percentage of your cell phone plan are all legitimate write-offs.
5. Waiting until April to organize: Reviewing your income and expenses once a month saves stress and prevents missed deductions.