How to use this expense tracker
Add a row for every business purchase: the date, who you paid, a category from the drop-down, how you paid, the amount, whether you have the receipt, and a short note on the business purpose. The categories are aligned to IRS Schedule C line numbers, so the totals you see by category are the numbers your tax preparer needs.
Below the table you get totals by month, totals by category, and a budget-versus-actual view for whichever month you select. Set a monthly budget for each category you care about; negative variance means you overspent. Everything is saved in your browser, so you can come back and keep logging.
Download Excel produces a three-sheet workbook: Expenses with drop-down validation for category, payment method, and receipt status; Summary with SUMIF and SUMIFS formulas that total each category, compare against your budgets, and break spending out by month; and Categories with the Schedule C reference list. Because the summary uses formulas over a 200-row range, you can keep adding expenses in Excel and the totals will follow. The CSV export is a flat log for Google Sheets or accounting software import.
Why track expenses at all
Three reasons, in order of how much money they are worth:
- Every untracked deductible expense is taxed as profit. A sole proprietor in the 22% federal bracket paying 15.3% self-employment tax loses roughly 35 cents of every dollar of forgotten expenses. $3,000 of unlogged software, mileage, and supplies costs about $1,000 in extra tax.
- You cannot defend a deduction you cannot document. In an audit, the burden of proof is on you. A category total with dated, described entries behind it survives; a round number does not.
- You cannot manage what you do not measure. The budget view exists because subscriptions, ad spend, and contractor costs creep. Seeing the month's variance in one glance is how small businesses catch the leak before it becomes a cash problem.
Deductible business expense categories (Schedule C)
The IRS standard is that an expense must be ordinary (common in your trade) and necessary (helpful and appropriate). Publication 334 and the Schedule C instructions define the lines. This tracker uses them directly:
| Category | Schedule C line | Typical examples |
|---|---|---|
| Advertising | 8 | Online ads, print, website hosting, business cards |
| Car and truck expenses | 9 | Standard mileage or actual costs (fuel, repairs, insurance) |
| Commissions and fees | 10 | Sales commissions, referral fees, marketplace fees |
| Contract labor | 11 | Freelancers and subcontractors (issue a 1099-NEC once 2026 payments to one person reach $2,000; the threshold was $600 through 2025) |
| Depreciation and Section 179 | 13 | Computers, equipment, furniture over the de minimis threshold |
| Insurance | 15 | General liability, professional liability, business property |
| Interest | 16a / 16b | Business loan and business credit card interest |
| Legal and professional services | 17 | Accountant, attorney, bookkeeper |
| Office expense | 18 | Postage, small office items, printer ink |
| Rent or lease | 20a / 20b | Equipment leases (20a); office, studio, storage (20b) |
| Repairs and maintenance | 21 | Fixing equipment or premises (not improvements) |
| Supplies | 22 | Materials consumed in the business |
| Taxes and licenses | 23 | Business licences, state fees, employer payroll taxes |
| Travel | 24a | Airfare, hotels, rental cars for overnight business trips |
| Meals | 24b | Business meals with clients or while travelling, 50% deductible |
| Utilities | 25 | Business phone, internet, electricity for a separate premises |
| Wages | 26 | W-2 employee pay (not your own draws) |
| Other expenses | 27a | Software subscriptions, education, bank fees, dues, listed in Part V |
| Home office | 30 | Simplified method or Form 8829 |
Two categories in the drop-down are deliberately not deductible: Owner draw and Personal / non-deductible. Logging them keeps your bank reconciliation complete without inflating your deductions: the tracker excludes them from the deductible total, the budget view, and the missing-receipt warning. Meals are logged at their full cost and counted at 50% in the deductible total, which is the figure that belongs on line 24b.
Some things people try to deduct that generally do not qualify: commuting between home and a regular workplace, business clothing that is suitable for everyday wear, club memberships, fines and penalties, and entertainment (the 2017 tax law eliminated the entertainment deduction; meals survived at 50%).
Receipts and IRS substantiation rules
To deduct an expense you must be able to show what you bought, how much it cost, when, and why it was for the business. Under Treasury Regulation 1.274-5, receipts are specifically required for lodging of any amount and for any other expense of $75 or more. In practice, keep every receipt, because a bank or card statement proves the payment happened but not what it was for; the IRS has disallowed deductions supported only by statements.
Practical rules that hold up:
- Photograph the receipt within a day and store it with the date and vendor in the filename. Paper receipts fade; the IRS accepts digital copies (Rev. Proc. 97-22).
- Write the business purpose on it. For meals: who you met and what you discussed. For travel: the client or event.
- Tick the Receipt box in this tracker only when the image or paper is actually filed. The warning above the summary lists what is missing so you can chase it while the vendor can still reissue it.
- Keep records for at least three years after filing, six if there is any chance income was under-reported by more than 25%, and for the life of the asset plus three years for anything you depreciate.
Vehicle expenses and the 2026 standard mileage rate
If you drive for business, you can deduct either actual costs (fuel, insurance, repairs, depreciation, prorated by business use) or the IRS standard mileage rate. The rate for 2026 changed mid-year:
| Period | Business rate |
|---|---|
| January 1 – June 30, 2026 | 72.5 cents per mile |
| July 1 – December 31, 2026 | 76 cents per mile |
Source: IRS, Standard mileage rates, announcements IR-2025-128 and IR-2026-29. Verify the current figure each January; the IRS normally publishes the new year's rate in December.
A 128-mile round of client visits in July 2026 is worth 128 × $0.76 = $97.28 in deductions. Either method requires a contemporaneous mileage log: date, destination, business purpose, and miles for each trip, plus the odometer reading at the start and end of the year. Log the trip in the notes column of the fuel entry, or keep a separate mileage sheet and enter the monthly total as one Car and truck row. Parking and tolls are deductible on top of the standard rate. Commuting from home to a fixed office is never deductible; trips from your home office to a client are.
Home office basics
You can deduct a home office if part of your home is used regularly and exclusively for business and it is your principal place of business or where you meet clients. Two methods:
- Simplified method: $5 per square foot, up to 300 square feet, for a maximum $1,500 deduction. No depreciation, no recapture when you sell the house, one line on Schedule C.
- Regular method (Form 8829): the business percentage of your home (office square footage ÷ total) applied to rent or mortgage interest, utilities, insurance, repairs, and depreciation.
A 150-square-foot office in a 1,500-square-foot apartment is 10%. If rent and utilities total $24,000 a year, the regular method gives $2,400 versus $750 under the simplified method. Log the full home costs under the Home office category and apply the percentage at tax time, or log 10% of each bill as you pay it. The exclusive-use test is strict: a desk in a guest bedroom that guests use does not qualify.
Keeping personal and business spending separate
Mixing personal and business money is the most common bookkeeping failure in small businesses, and it does three kinds of damage: it makes tax prep slow and expensive, it weakens the liability protection of an LLC or corporation, and it means you never know how the business is actually doing.
- Open a dedicated business checking account and card even as a sole proprietor. Every legitimate expense then appears on one statement.
- When you must use a personal card, tag it as Personal card (reimburse) in this tracker and reimburse yourself from the business account with a matching transfer. The expense is still deductible; the reimbursement is not a second expense.
- Pay yourself with explicit owner draws, logged as such. Draws are not expenses and do not reduce profit or self-employment tax.
- Split mixed bills. If your phone is 70% business, log 70% of the bill. Keep a note of how you decided the percentage.
A monthly review routine
Fifteen minutes on the first business day of the month is enough:
- Add any receipts you have not logged. Compare the tracker's month total to your bank and card statements; the difference is what you forgot.
- Clear the missing-receipts list, requesting reissues from vendors where needed.
- Read the budget-versus-actual table. For each red variance decide: was it a one-off, a price increase, or a habit?
- Move any categories that are consistently far over or under budget to a realistic number so the variance signal stays meaningful.
- Download the Excel file and store it with the month's receipt images. You now have a self-contained audit folder.
- Once a quarter, drop the category totals into your profit and loss statement and check your estimated tax payment with the self-employment tax calculator.
Issue a receipt to your own customers with the same discipline you expect from vendors; the two records reconcile against each other at year end.
When to switch to accounting software
A spreadsheet tracker is the right tool when you have a few dozen transactions a month, no employees, and no inventory. Signs you have outgrown it:
- You spend more than an hour a month keying transactions that a bank feed could import automatically
- You send recurring invoices and need to see who has paid
- You carry inventory or need cost-of-goods tracking
- You have employees or contractors to pay and 1099s to file
- Your accountant asks for a general ledger rather than a category summary
- You need a balance sheet for a loan application and cannot produce one from your records
Modern packages connect to your bank, suggest categories, attach receipt photos to transactions, and export Schedule C totals directly. Our guide to the best accounting software for small business compares the options by price and by the size of business each suits. Until then, this tracker's CSV export imports cleanly into all of them, so nothing you log here is wasted.