Ryan Vaughn explains that independent contractors must track all business income, even if it's not on a 1099 form. The IRS checks your bank deposits during audits, so your records need to match. Use a spreadsheet for simple tracking or QuickBooks Online if you have lots of transactions.
You need to track your business income. As an independent contractor, not all of your income may be reported to you on some sort of form. Again, that's likely gonna be a 1099-NEC or a 1099-MISC, but it's possible you received income that's not reported there. If you're audited, the IRS is going to look at your bank accounts. They're gonna look at your deposits. So you're gonna wanna make sure that your business income matches the business deposits. So you track that, and then you track your deductions, expenses, synonymous words. How do you do that? You're not— it's not a super active independent contractor activity. We have clients who do that just with an Excel file. If it's your full-time gig and there's a decent amount of transactions, QuickBooks Online is a great option.
