Why records matter more on a 1099
With a W-2 job, your employer keeps the records and sends you one form. On a 1099 you are the business: you report your own income, and every deduction on your Schedule C has to be backed up. The IRS calls this the burden of proof: the responsibility to prove the entries, deductions and statements on your return is yours.
Good records do three things. They let you report the right income even when a form is missing or wrong. They let you claim every deduction you are entitled to. And they are your answer if you get a letter from the IRS.
In our example of a delivery driver who earns $38,500, the 12,000 business miles are a deduction of $8,912, which lowers the federal tax bill by about $1,975. Without a log, that is the first thing you can lose.
What to keep
Except in a few cases, the law does not require any special kind of records. Any system works if it clearly shows your income and your expenses.
| What | Records to keep |
|---|---|
| Income | Forms 1099-NEC and 1099-K, the earnings summaries from each app, invoices, bank deposits and a note of every cash payment and cash tip |
| Car | Mileage log, odometer reading at the start and end of the year, and a record of parking and tolls. With the actual expense method, also gas, insurance, repairs and registration |
| Other expenses | The receipt or invoice, plus the bank or card statement that shows the payment: phone bill, supplies, equipment, fees |
| Home office | Measurements of the space, and your rent, utilities and insurance bills |
| Health insurance and retirement | Premium statements, Form 1095-A if you have Marketplace coverage, and contribution statements |
| Taxes you paid | Confirmation number, date and amount of each estimated tax payment |
| Things you own for work | Purchase contract or invoice for the car and equipment, and the date you started using them for work |
| Your returns | A copy of every return you file, with its forms and worksheets |
You have to report all your income even if no Form 1099 arrives. Our guide on reporting income without a 1099 shows how to add it up.
What a good receipt shows
For each expense, the IRS wants documents that identify who you paid, the amount, the date, proof that you paid, and a description that shows it was for your business. One document rarely shows everything, so it is normal to combine them:
- The receipt or invoice shows what you bought.
- The bank or card statement shows that you paid. On its own, proof of payment does not establish a deduction.
- Your own note shows why. Write the business purpose on the receipt or in your log when it is not obvious.
Three rules are worth knowing:
- Small car and travel costs. For travel, gift and transportation expenses, such as parking and tolls, the IRS does not ask for the receipt itself when the expense is under $75 (lodging always needs one), or when a receipt is not readily available. You still have to record the amount, the date, the place and the business purpose. For everything else, like supplies or your phone bill, keep the receipt or the bill.
- No estimates for car and travel. For these expenses, you cannot deduct amounts that you approximate or estimate.
- Photos and scans count. The same requirements apply to electronic records as to paper ones: they have to be complete, legible and available if the IRS asks for them. A record you prepare on a computer or in an app counts as a written record. Paper receipts fade, so photograph them the same day and keep a backup.
The mileage log
For most drivers, this is the record that is worth the most money. The IRS expects it to show:
- the date of each business use of the car;
- the miles of each use;
- where you went, by destination or area;
- the business purpose;
- your total miles for the year. Write down the odometer reading on January 1 and December 31.
Three IRS rules make it easier than it sounds:
- Once a week is on time. You do not have to write down every trip the same day. A log that you fill in each week for that week counts as a timely record. A record made at the time is worth more than one prepared later from memory.
- One entry can cover a whole route. Several uses that are part of a single use, such as a round trip or an uninterrupted stretch of business driving, can go in one entry. The IRS’s own example is a delivery route with several stops. A stop for lunch between two business stops does not interrupt it.
- An obvious purpose needs no explanation. If the business purpose is clear from the circumstances, you do not have to write an explanation for each trip. A short note such as “deliveries, downtown” is enough.
A mileage-tracking app creates this record for you. The trip history in the delivery and rideshare apps is useful evidence of your dates and trips, but it may not include all your business miles, such as the drive between orders, and it does not show your total miles for the year.
Which miles count, and whether the mileage rate or your actual costs give you more, is in our guide to standard mileage vs actual expenses.
How long to keep everything
The clock starts when you file the return. A return filed early counts as filed on its due date.
| Situation | Keep the records |
|---|---|
| Most returns | 3 years after you file |
| You claim a refund or credit later | 3 years after you filed, or 2 years after you paid the tax, whichever is later |
| You left out income that is more than 25% of the gross income on your return | 6 years |
| You deduct a bad debt or a loss from worthless securities | 7 years |
| You did not file a return, or filed a fraudulent one | With no time limit |
| A car or equipment you own | Until the period ends for the year in which you sell or dispose of it |
| Payroll records, if you have employees | At least 4 years |
For a 2026 return filed on time by April 15, 2027, the general period ends on April 15, 2030. If you file later with an extension, count from the day you actually file: a return filed on October 15, 2027 takes you to October 15, 2030.
The 6-year rule matters to 1099 workers. If your return shows $40,000 of gross income and you left out more than $10,000, for example a 1099 you forgot or cash you did not count, the IRS has 6 years to assess the tax instead of 3.
Two more things:
- Keep copies of your returns. The IRS recommends it, because they help you prepare future returns and amend an old one.
- Check before you throw anything away. An insurance company or a lender may need your records for longer than the IRS does. State tax agencies set their own periods, so check your state’s too.
If you did not keep records
- Income. Download the yearly summaries from each app and your bank statements. Your IRS online account also has a wage and income transcript that lists the 1099s and other forms filed under your name, for the current year and the 9 years before it. It only shows what payers sent to the IRS, so it may not include all your income.
- Expenses. Ask the store or provider for a copy of the invoice, and use your bank and card statements to find the payments.
- Miles. You cannot deduct an estimate, but you can rebuild the record. The IRS accepts your own detailed statement together with other evidence, and it says that the nature of your work, such as making deliveries, helps show the car was used for business, and that delivery records establish when you used it. Gather the trip and delivery history from the apps, your calendar, and repair or oil-change invoices that show your odometer reading.
- Start a log now. The IRS lets you keep a detailed log for part of the year and use it for the whole year, if you can show that those weeks are representative of the rest. Its example is a log kept during the first week of every month.
- Fire, flood or another casualty. If your records were destroyed for reasons beyond your control, you can prove a deduction by reconstructing them.
A simple routine
- Use a separate bank account for your work. The IRS recommends it, and it turns your statements into a list of your business income and expenses.
- Once a week, fill in your mileage log, photograph the week’s receipts and save the earnings statement from each app.
- Once a month, compare your deposits with the app statements and write down any cash income.
- On January 1 and December 31, write down your odometer reading.
- In January, download the yearly summaries and your 1099s, and put everything for the year in one folder with a copy of the return you file.
When you sit down to file, these records are what you need for Schedule C: your income on line 1, your car on line 9 and each expense on its own line. To see what your miles are worth, use our mileage deduction calculator.