Earning money from self-employment may involve endless networking, self-promotion and chasing the work itself, so once you get paid for your freelance efforts, it may seem like that chapter is closed. Actually, getting paid for self-employment work is just the beginning. Working for yourself means you alone are keeping track of the financials and that you’re responsible not just for balancing your own books, but making sure the government gets its share. Treat creating a solid recordkeeping system for self-employed income as another important part of the job.
Determine your method of keeping track of your income — electronic or paper ledger. You may prefer the electronic version, usually through a spreadsheet or word processing program, as you can edit, add to and send the financial details at any time.
Create a table on the paper page or word processing program. A spreadsheet program is already set up in a gridlike format. Add column headers for “Date of Pay,” “Payer,” Description of Work,” “Payment” and “Taxes.” Add another column with a checkmark symbol, or draw a checkmark on the top of the page’s column.
Enter the first date you received a payment for freelance work. Press “Tab” to move to the next column where applicable. Type or write the name of the organization that contracted you for the work. Type or write a description of the work, such as “Created new auto brochure” or “Landscaped mulch at apartment complex.”
Type or write the amount received for the work in the “Payment” column. Enter the amount paid to the government in the “Taxes” column. If preferred, make two columns, one titled “State Taxes” and calculate your 7 percent, and one titled “Federal Taxes” and calculate 30 percent; these figures include your self-employment taxes and may vary state to state.
Make a checkmark in the check box column after you’ve received payment and sent or put aside the taxes for quarterly payments to the Internal Revenue Service. If this column isn’t checked, you’ll be able to view at a glance what still needs to be done.
Save the document where applicable and reopen it each time you receive a self-employment payment. Another option is to save the document template before you start filling it in and reopening it each time to mark a payment record. Then resave it with a new version name, such as the date, to keep separate, ongoing records of payments.
Fionia LeChat is a technical writer whose major skill sets include the MS Office Suite (Word, PowerPoint, Excel, Publisher), Photoshop, Paint, desktop publishing, design and graphics. LeChat has a Master of Science in technical writing, a Master of Arts in public relations and communications and a Bachelor of Arts in writing/English.