1. Separate Business and Personal Accounts - The most important thing you can do right away is to separate out your personal and your business spending. If you have a PLLC go ahead and open a business checking account. If you don't and are using a DBA, open a checking account that is separate from your personal checking so you have your money going into a different account.
Consider also setting up a savings account that your checking account is linked to: you can automatically set aside money each month (taxes? planning for a conference?) and it serves as an overdraft protection. Also, a business credit card can be a great way to both track your spending and earn cash back or miles!
2. Categorize your expenses - Now that you have all your work-related income and expenditures going in and out of a separate account, it's time to track your expenses. Ever payment you make should be categorized so that when it's time for taxes, your deduction categories are already set up. I suggest getting familiar with the categories, and setting them up now.
Use a program like Xero, Quickbooks, or Mint to track your expenditures and label them. This will save you SO much time later on. Promise. ** Note: These are NOT HIPAA compliant so you cannot use them to track your client payments. Quickbooks desktop CAN be used for that. If you use an EHR system you can track your client payments on EHR (do invoicing there) and your expenses on your accounting software.
3. Track Credit Card Fees You Are Charged - Another thing I see folks forgetting to do is to track how much money is getting deducted by the credit card companies. For example, when you see a deposit of $470 into your account, you need to open that entry and show that your client income was $500 but $30 was deducted in Stripe fees (for example). That way your income matches up with the actual money you took from clients and you also account for the $30 you paid Stripe (which may be deductible later).
4. Deduct travel for conferences - Travel, food during travel, and conference fees are all deductible come tax time. Make sure you keep the receipt, and write a note on the top showing what it was spent for (e.g. "Psychology Conference in Houston").
5. Pay Quarterly Taxes - One of the ways you can avoid getting hit with taxes later is to pay your estimated quarterly taxes. You may also be required to pay an incur a penalty if you fail to. This is one of the biggest changes from being employed to on your own. For more information, check out Quickbook's explanation here.
6. Deduct Food Expenses - If you eat out in the course of doing business, you may be able to deduct 50% of the tab. There are a couple tricky spots that you might get in trouble with... If you only pay for yourself, and not your companion, the IRS might not accept that as a work outing. Also, you need to be able to explain what that meeting was about. Make sure you list on the receipt who you met with and a couple items discussed.
7. Set up a retirement and safety plan - You might not think you're making enough to save, but it's never too soon to be ready. Consult with a financial planner to determine the best way for your family to save. You might also consider investing in life insurance, or disability insurance.
8. Medical Expenses - If you are not married, or if your spouse doesn't have a plan that you can join, you may be able to deduct your health insurance and medical expenses. Talk to a CPA to find out more.
9. Legal and Professional Fees - You can deduct fees spent on legal and professional services. These include paying for your accountant, lawyer who draws up your incorporation agreement or consent paperwork, fees for your membership to professional agencies, licensing board fees, continuing education fees, and so on.
10. Track Your Mileage - Believe me, it's worth it. Download one of the many apps to make it simplier. For details on mileage tracking, check out the rules here. I've tried a few and MileIQ is by far my favorite to date. It automatically logs your drives as soon as it senses you are moving, and it lets you categorize your drives to business or personal by swiping them (so quick!). Plus, it will autocategorize drives you make frequently.