What Can Help Your Tax Savings When You Start Self-Employment
Practical tax savings steps for new self-employed workers in Canada and the US: separate accounts, track mileage, keep receipts, and avoid missed deductions.
When you start self-employment, taxes become your job. The best tax savings usually come from simple habits that create clean records. If you track things well, you stop missing deductions and you stop guessing at the end of the year.
This guide covers the most common ways self-employed people save money on taxes in Canada and the United States, with a strong focus on mileage.
Separate business money from personal money
This is the first habit that pays off.
Keep it simple:
- Business income goes to one place.
- Business spending comes from one place.
- Mixed-use items (like phone or internet) get a short note so you remember the business part.
Clean money flow makes everything easier: bookkeeping, tax filing, and audits.
Track mileage from day one
Mileage is one of the biggest deductions for many self-employed people who drive for work. It is also one of the easiest to lose, because people forget trips.
A usable mileage log includes:
- date
- where you started and ended
- why the trip was for work
- distance
Canada usually thinks in kilometers. The US usually thinks in miles. The idea is the same: business driving must be recorded. MileLog app can be downloaded for iPhone and iPad and export in Mac.
Canada: business-use percent
In Canada, vehicle deductions are usually based on business use. You track total kilometers for the year and business kilometers for the year. Then you apply the business-use percent to eligible vehicle costs.
Your log is what turns driving into a real deduction.
United States: mileage rate or actual costs
In the US, self-employed people often use either a standard mileage method or actual vehicle costs. Either way, business miles and trip purpose still need records.
Use MileLog to build a real mileage log
Most people do not lose deductions because they do not work hard. They lose deductions because tracking is annoying, so they stop.
MileLog is your mileage tracking app. It is built to reduce the work:
- It detects trips automatically while you drive.
- It lets you classify trips quickly by swiping business vs personal.
- It generates tax-ready reports for Canada (CRA) and the US (IRS).
That single routine (capture → classify → report) is often the difference between "I think I drove for work" and a mileage log you can stand behind.
Track common self-employment expenses
Mileage matters, but it is not the only place where money is lost. Many small costs add up.
Common expense categories:
- software you use for work
- supplies
- equipment used for work
- website costs (domain, hosting)
- marketing costs
- accounting and legal fees
- business insurance (if it applies to your work)
Two rules keep this easy:
- keep the receipt
- write a short note for the business reason
Keep home office records simple and honest
If you work from home, you may be able to claim part of your home costs. This works best when your records are simple:
- the work area size
- the total home size
- the bills and receipts
- a short note on how the space is used for work
A clear method beats a complicated method.
Set aside tax money during the year
Self-employment income often has no automatic tax withheld. If you treat all income as spendable, tax time becomes a cash problem.
A stable approach is to set aside part of every payment for taxes, consistently, all year.
Summary
Tax savings for self-employment come from proof. Proof comes from records. Records come from routine. Start with clean business spending and a complete mileage log. MileLog is built to make the mileage part automatic and easy, for both Canada and the US.