The Basics of Business Expenses and Deductions

Disclaimer: This article is for educational purposes only. It is not meant to be a substitute for tax advice or accounting guidance. 

ABG Doula Training is proud to include a substantial amount of business-focused education for our trainees. We want our doulas to leave our program prepared to start and run their own businesses, if they so choose.

For self-employed folks, it’s important to learn about tracking and reporting tax-deductible business expenses in order to seek tax deductions. Self-employed people are taxed at very high rates, because of the fact that we pay both employee and employer taxes. Thus, it’s very important that we learn the proper ways to submit deductions to reduce our tax liability.

Whether a self-employed person has registered their business as an LLC or not, if they run their own business by themselves, they are considered a sole proprietor. You can read up on the different types of business entities recognized by the IRS here. Sole proprietors are responsible for tracking their income and expenses for tax reporting.

Common Business Expenses for Doulas

Some of the most common expenses we have incurred as doulas include the following:

• Mileage to and from client visits (also consider: tolls and parking)

• Trainings and continuing education (like our postpartum doula training!)

• Books and online courses

• Supplies

• Website and hosting fees

• Online directory listings and other advertising 

• Scheduling software 

• Annual memberships or certification fees

• Other apps or software

• Office space or home office space

• Business meals (may include networking meals and/or meals with clients)

• Travel expenses (if you travel for client care, trainings, or conferences, for example)

• Insurance

• “Uniforms” or branded/doula-specific clothing 

• Apps you use while with clients/on the job (Spotify, baby tracking apps, etc.)

• Required technology (laptop, for example)

Tools for Tracking Business Expenses

We are not a sponsor for any of the following tools. These are just some of the tools we have used or seen colleagues use for business tracking. Many of these include mileage trackers that can be used to integrate that expense into your reports. Some programs offer invoicing and/or direct payment software.They may also offer the option of photographing receipts to pair with transactions. It may be helpful to discuss your business structure, goals, and needs with an accountant to learn which program they may recommend for your business.

• Quickbooks Online (more comprehensive) or Quickbooks Solopreneur(less comprehensive)

• Expensify

• Wave

• Spreadsheets: You can simply export your bank statements into a cvs file and use any spreadsheet software to interact with your transactions.

Our Top Tips for Tracking Tax-Deductible Expenses

On the topic of expenses, these are some of our go-to tips for starting strong with your tracking:

1. Open a business bank account ASAP. Tracking both income and expenses will be the most easeful and organized if you open a business bank account and run all business-related transactions through this account.

2. Track and categorize regularly. We always suggest checking in with your accounting every month or so (vs. waiting until the end of the year). This can help prevent overwhelm and confusion. You will typically need to categorize each expense into categories, and in some cases, you will need to match your bank account with your balance in your accounting software (this is called reconciling). 

3. Use an app for tracking mileage. While sometimes lower tech solutions are the best ones, for tracking mileage, we don’t recommend pencil and paper, especially if you are driving to clients regularly.

4. Keep receipts. Documentation of expenses is required in the case of an audit. Snapping photos will be the easiest way to keep track, and you may use a folder in the cloud or one of the digital tools for tracking expenses.

Join Us for Postpartum Doula Training

ABG offers both online (self-paced) and in-person trainings for folks who are interested in becoming postpartum doulas. We’d love to be a part of your journey in growing your postpartum care business.

*Photo credit: Canva