So you have a Schedule C…but what goes on it?!
3 Commonly Forgotten Small Business Expenses and How to Capture Them | 6 minute read
Organizing all the designated year-end tax documents sent to you can be a major challenge in itself. But what happens when your tax accountant (or shiny new AI tax software) says, “And did you have any expenses related to this self-employment income?” Many new business owners can freeze up at this open-ended question. Either no expenses will come to mind, or a thousand might rush in along with the daunting realization of how many hours it would take to track down receipts for all these items, if they could even be found.
The best way to prevent that last-minute panic would be to track expenses throughout the year - like starting now! But what kinds of expenses should you be tracking and how? Here you’ll find 3 commonly forgotten small business expenses, who you might be buying them from, and how to document them. At the end of the post, you’ll be able to access a comprehensive guide including a checklist with 7 MORE commonly forgotten expenses and tons of detailed expense tracking information. Check it out!
Professional Tools & Software
Professional Tools & Software are business apps and software that you pay to use either as a one time license fee or a regular subscription. These could include:
Scheduling apps, like Acuity or Calendly
Business or client management software, like Zoho or Salesforce for any industry or Vagaro, MindBody, or SimplePractice for specific industries
Accounting tools, like Quickbooks or Xero
Document management and editing software, like Adobe, Microsoft, or Dropbox
To manually track payments to these companies, follow these steps:
Review the business bank account or credit card statements for professional tool and software charges,
Create a list of the relevant vendors paid, and
Compile a folder of downloaded vendor receipts, emails, account summaries, or payment histories from app stores that confirm the amount paid and describe the tool or software purchased.
To track these payments using bookkeeping software, instead:
Make sure to pay for the tools or software with a business bank account or credit card,
Link the bank account or credit card to your bookkeeping software to establish a live feed,
Categorize the relevant charges by vendor and expense type, and if you want to go above and beyond,
Attach PDFs of the receipts or account summaries to each transaction, to be viewed on demand.
Payment Processing Fees
Payment Processing Fees are nominal amounts or small percentages of sales prices paid in the course of collecting payments. These could include:
Payment processors, like Stripe, PayPal, or Square
Point-of-Sale (POS) System Providers, like Square POS, Clover, or Toast
Business management platforms with integrated payments, like MindBody, Vagaro, SimplePractice, or Acuity
To track these fees, download monthly statements or in-platform fee breakdown reports from the payment processor. If you are using bookkeeping software, these fees may be reflected as separate line items in the connected bank feeds or may be netted with the gross payment received amount. You may also receive a Form 1099-K, an information return for payment card and third party network transactions, from a payment processor if through them you accept over $20,000 across at least 200 separate transactions.¹
¹ H.R.1 — 119th Congress (2025-2026). Section 70432.
It is a best practice to periodically check breakdown reports against what actually hits your business bank account. This is also a good time to review your average processing fee per transaction and consider whether the payment methods you currently accept and processors you currently work with are best serving your business.
Education, Training, and Licensing Fees
Education, Training, and Licensing Fees are tuition and related costs that keep your industry knowledge up-to-date and fees for designations that maintain professional credibility and legality. These could include:
Continuing education classes, from industry educational boards
Industry-specific training, from brand education programs, Udemy, or Coursera
State or local licenses to practice, from state departments of licensing
Memberships in professional organizations, from industry associations
Annual safety certifications, from state or local regulatory agencies
Tracking these items are important for two purposes: your books and your professional status. If your industry requires a specific license and continuing education to maintain that license, you may already have a digital file stuffed with certificates of completion. Many organize this file with a spreadsheet that logs the dates and durations of classes or workshops attended, their topics, and their relevance. You could make this log dual-purpose by adding a column for tuition or other costs paid.
Don’t forget that the fees to maintain a professional license and membership dues in professional organizations are also business expenses. These may be tracked using the same method selected for Professional Tools & Software.
Educational deductions are such a complex area! Stay tuned for an upcoming blog post all about the factors that determine whether expenses qualify as work-related education and how to document them along with some true to life examples.
TL;DR
By proactively tracking often-overlooked expenses, like software subscriptions, payment processing fees, and professional development and education costs, you can maximize your deductions and avoid scrambling at tax time. Set up your systems now, and let your bookkeeping work for you all year long.
Looking for More?
Looking for even more expense categories to jog your memory? Check out this free 16-page Solopreneur’s Guide to Business Expenses for more commonly forgotten expenses, interactive worksheets, and discussions of tricky areas, like mileage, education, and home office expenses.
Looking for Support?
Eager to track all your income and expenses, but not sure where to start? Reach out to get connected with a qualified bookkeeper.