When I first started writing, back in pre-computer days, I had a little ledger that I kept track of everything I spent on my writing: postage, paper, typewriter ribbons, index cards, etc. The ledger was easy to update, but since I hadn't sold anything yet, it was more practice than anything else.
After I had a few books published and began traveling to conventions not as a fan, but as a published author, I didn't have time to keep organized records. All receipts and notes on expenses throughout the year got dumped into a box, and the first week or so of January was spent separating out all those office invoices and receipts and travel expenses and re-organizing everything into something an accountant could make some sense of. I had checked with the authors at my university and went with the accountant the mystery writer in the English Department used. That accountant wisely sent out a worksheet every year listing the expenses I could deduct, and, after organizing and sorting everything (usually on the floor, which worked until my birds blew over stacks whenever they flew in to investigate what I was doing), it was a simple matter of filling in the blanks on the worksheet.
I'm sure other authors have spreadsheets or software programs that are much more efficient. What system do you use?
Finally, two small bits of self promotion: First, Saturday, January 3rd, is the last day of Amber Quill Press' New Year's 50% off sale. Which means the e-versions of my books, The Crystal Throne, Talking to Trees and Agents & Adepts are 50% off today through Saturday (Jan. 3, 2015).
Second, on January 4, 2015, Amber Quill Press will have a free short story by me on its website. Look for "Hiding In Plain Sight" starting January 4th.
