You will know the amount of your commissions each month.
In my experience, independent contractors are not as efficient tracking expenses.
Keep a folder that you put receipts into and make a good effort to be disciplined about it.
There is a 15.3% Self Employement Tax on your profit. That is 6.2 employer Social Security, 6.2 employee and 1.45 Medicare employer and 1.45 employee, all adding up to 15.3.
If you do not track expenses and mileage, you pay much Self Employment Tax.
Set aside a time each month (for example, third Sunday from 3 to 5 PM) and collate the receipts on a cover sheet.
You are going to send in at least 15.3% of your profit each quarter for SE tax and then some additional amount to cover the income tax bill.
Regarding mileage:
There are apps that will help you track mileage.
Put in your calendar for Decenber 27 through 31 of each year to take a picture of your vehicle odometer.
It shows competence when the tax return has the beginning and ending mileage of the vehicle and then we can breakdown between business use and personal miles.
