Free Business Expense Tracker (Excel with Formulas, Fillable PDF, Word)

What is on the page

Category (Schedule C line)

Advertising (line 8), car and truck (9), commissions (10), contract labor (11), depreciation (13), insurance (15), interest (16), legal and professional (17), office expense (18), rent (20), repairs (21), supplies (22), taxes and licenses (23), travel (24a), meals (24b), utilities (25), wages (26), other (27a). Coding each expense to a line as you go is what makes year end a copy job.

Business purpose

For meals, travel and anything a reviewer might question, a few words on why: who you met, which client or project. The IRS requires it for meals and travel and it is useful for everything.

Deductible %

Most expenses are 100%. Business meals are 50%. Mixed-use items (a phone, home internet, a personal vehicle) are deductible at the business-use share, which you should be able to justify.

Paid by

Which card, account or cash. Matching the log to statements is how you catch missed items; paying business expenses from one dedicated card makes it trivial.

Receipt reference

Where the receipt is: a number on the paper copy, a file name, or the folder. The IRS accepts digital copies; what it does not accept is a card statement alone for items over $75.

Reimbursed on / how

On the receipt log: when and how the business paid you back. Under an accountable plan, reimbursements are not income to you and are deductible to the business, provided they are substantiated within a reasonable time (60 days is the safe harbor).

Which sheet to use

• Expense log: the working record. One per month, filled as expenses happen (or weekly from statements).
• 12-month summary: the year-end view by category. Copy each month's category totals from the logs; the year column is Schedule C.
• Receipt and reimbursement log: when the person paying is not the business: an owner of an S corp or LLC paying with a personal card, an employee fronting expenses, a freelancer billing a client for costs.

What counts as a deductible business expense

The IRS test is "ordinary and necessary": common in your trade and helpful to the business. Software, supplies, professional fees, insurance, advertising, business travel, a business phone, contractor payments, rent for business space and the business share of mixed items all qualify. Business meals are 50% deductible when you or an employee is present and the meal isn't lavish; entertainment (tickets, golf, club dues) hasn't been deductible since 2018. Commuting from home to a regular workplace is never deductible; driving between work locations and to clients is. Clothing is deductible only if it's unsuitable for ordinary wear (a uniform, safety gear), not a suit. Startup costs before the business opens are deductible up to $5,000 in the first year and amortized after that. Capital items (equipment over the de minimis threshold, vehicles, furniture) are depreciated or expensed under Section 179 rather than logged as expenses which is why the summary has a separate depreciation line.

How to keep the log

1. Pay every business expense from one business card or account. Personal payments go on the reimbursement log.
2. Record expenses as they happen, or every Friday from the card statement. Vendor, purpose, category, amount, receipt reference.
3. Photograph or save the receipt the same day, named with the date and vendor, in a folder per month.
4. At month end, total each category and enter it on the 12-month summary. Reconcile the log total to the card statement.
5. In January, the summary's year column plus mileage, home office and depreciation is your Schedule C Part II. Hand it to your preparer with the P&L.

Receipts: what you must keep

For expenses of $75 or more, and for all lodging regardless of amount, the IRS requires documentary evidence: a receipt, invoice or bill showing the amount, date, place and nature of the expense; a card statement alone does not satisfy it. Under $75 the log entry suffices, though keeping the receipt costs nothing with a phone. Digital copies are acceptable if legible and retrievable. Keep records for three years from the filing date in general, six if income was substantially under-reported, and for as long as the asset is owned plus three years for anything depreciated. Vehicle expenses need a contemporaneous mileage log in addition to receipts.

Editing the Excel versions

Excel totals the log, calculates the deductible amount from the percentage, sums the 12-month summary by category and by month, and totals the reimbursement log. Rename the categories to match your own chart of accounts (keep the Schedule C line in brackets for the preparer). The personal version of this sheet is the expense tracker; contractor payments that may need a 1099 go in the 1099 payment tracker.

Questions

Do I need receipts for everything?

Legally, for expenses of $75 or more and all lodging. In practice, keep them for everything: a phone photo takes five seconds and removes any argument. The log alone is acceptable evidence for small items under $75.

Can I deduct my cell phone?

The business-use share of a personal phone, based on a reasonable estimate of business versus personal use. A second line or phone used only for business is 100% deductible. The first landline into a home is never deductible.

Are business meals deductible?

50%, when the meal is with a client, prospect, contractor or employee for a business purpose, or when you're traveling for business. Entertainment isn't deductible. Record who, where and why on the log.

What is an accountable plan?

An arrangement where the business reimburses an owner-employee or employee for substantiated business expenses within a reasonable time, and any excess advance is returned. Reimbursements under it are tax-free to the recipient and deductible to the business. The reimbursement log with receipts is the substantiation.

Should I use this instead of accounting software?

For a sole proprietor with a few hundred transactions a year, a dedicated business card plus this tracker is enough and cheaper. Once you've employees, inventory or sales tax to file, software that pulls transactions from the bank automatically pays for itself in time saved.