The January checklist for the self-employed

In January, a sole proprietor should write down the vehicle's odometer reading, make the fourth-quarter estimated tax payment due in mid-January, watch for 1099 forms from clients, close out last year's records, and start this year's mileage log, receipt habit, and invoice routine from day one.

The checklist

1. Write down your odometer reading. Schedule C asks how many miles you drove your vehicle for business, commuting, and other purposes during the year. An odometer reading on January 1 and another on December 31 gives you the total. Take a photo of the dashboard and keep it with your tax records.
2. Make the fourth-quarter estimated tax payment. If you pay estimated taxes, the payment for September through December of last year is due in mid-January. Check the date on the IRS estimated tax page, since it moves when the 15th falls on a weekend or holiday.
3. Watch for 1099 forms. Clients that paid you $600 or more generally send a 1099-NEC by the end of January. Compare each one to your own income records and ask the client about any difference now, not in April.
4. Close out last year. Make sure every trip, receipt, and invoice from last year is recorded, and export your year-end numbers. In Self Employment Toolkit, the Schedule C bundle on the Reports tab is that export.
5. Start this year's mileage log on day one. The IRS expects a log written at or near the time of each trip, with the date, destination, business purpose, and miles. Logging the first trip of the year is the habit that makes the rest easy.
6. Set up a receipt habit. Pick one way receipts get recorded and use it every time: a photo right after the purchase, or forwarding the email receipt. A receipt in a shoebox in December is a receipt you will not find.
7. Put invoicing on a schedule. Invoice on the same day each month, set recurring invoices for retainer clients, and turn on payment reminders so overdue invoices follow up without you.

Why January is the right time to change tools

Switching in the middle of the year leaves you with two half-records to add together at tax time. Switching in January means one tool holds the whole year. If you are planning to leave QuickBooks or a mileage app, do it before your first business trip of the year.

Self Employment Toolkit is free to start with unlimited mileage trips, and imports expenses and trips from QuickBooks and the major mileage apps. Free covers unlimited mileage trips, 10 time entries a month, and unlimited clients, expenses, and invoices. Pro is $6 a month or $48 a year and adds unlimited time entries, AI receipt reading, email-to-expense forwarding, mileage export, the Schedule C year-end bundle, and the quarterly tax estimator.

Common questions