Image © Depositphotos.com/miflippo
During the month of March, a number of professional organizers shared their top tips for tax time preparation on the NAPO Get Organized Blog. A common theme that emerges across the various blog posts is the need to keep up with your tax organizing and record-keeping on a regular basis so that you avoid the overwhelm associated with tackling all of it in one giant batch process session during the beginning of each year.
I could not agree more with this! As a recovering “batch processor”, I can tell you that doing a little bit of tax organizing on a regular basis makes the entire tax preparation process significantly less stressful.
As most readers know by now, I am a bit of a techie; whenever possible, I like to use technology-based solutions to automate processes, work in a mobile environment, and keep the paper in my life to a minimum. Today, I’d like to share some technology-based solutions that I use in order to keep on top of my tax record-keeping on a regular basis throughout the year.
1. TAX ORGANIZING MADE SIMPLE WITH MILEBUG MILEAGE TRACKER APP
As a business owner, keeping track of my mileage is a necessity. Even if you do not own a business, you may choose to track your mileage for work reimbursement purposes, or for claiming a tax deduction for medical expenses and/or volunteer work. The MileBug app is my method of choice for capturing all of this information.
MileBug enables me to track and classify every trip I take with my vehicle, using either a manual entry odometer method, or GPS tracking. At any time, I can generate and email mileage reports to myself (or my accountant) in either an HTML or Excel-readable format. I can also back up my data to iTunes or other cloud storage services so that I won’t lose my information, even if I lose my device.
Tracking mileage is not easily accomplished in an end-of-year mega marathon documentation session. It really needs to be tracked on a daily basis, and utilizing a mileage tracking app such as MileBug makes the process infinitely easier.
2. TAX ORGANIZING MADE SIMPLE WITH THE IT’S DEDUCTIBLE DONATION TRACKER APP
Have you ever sat down with a stack of Goodwill donation receipts that spanned the previous 12 months and attempted to itemize every book, clothing and household item you donated? It’s not fun.
I used to itemize all of the charitable deduction information when I sat down to complete my taxes each year. After attempting to itemize the 8th donation drop-off receipt, I would throw up my hands and declare that the tax deduction was not worth the aggravation of of itemizing…can you relate? Even if I was willing to persist through this frustrating task until the last donation receipt was processed, the accuracy of the information would likely be questionable. After all, would I truly be able to remember each item that was in that box of “housewares” from 8 months ago?
So I got wise, capitalized on my penchant for a cool app, and downloaded It’s Deductible. The rest is history.
It’s Deductible actually makes record-keeping fun! It is available as both a web application and a mobile app. It provides a means of tracking cash donations, and household goods donations. For more information on how it works, see my blog post on keeping organized charitable contribution records.
When I am able to see my estimated tax savings after entering itemized donations each month, it provides all the incentive I need to keep up with this tax organizing maintenance task.
3. TAX ORGANIZING MADE SIMPLE WITH THE CAMSCANNER APP
Managing receipts is a necessary evil in the world of tax documentation. Business-related expenses, big ticket item purchases, medical expenses, home improvement expenses…all require a supporting document to legitimately claim those coveted tax deductions. A receipt typically serves that purpose. Trouble is, receipts fade, get lost, and create a tremendous amount of paper clutter in our homes.
In an effort to circumvent all of these challenges, I choose to scan my receipts as often as possible (yes, the IRS does accept electronic copies of documents). Oftentimes, I’ll use my Fujitzu Scansnap Scanner to transform receipts into electronic documents. When I’m not at my home office, I use the CamScanner app to quickly capture a receipt while on the go.
This app basically transforms my smartphone into a portable scanner that creates both PDF or JPG documents that I can either email to myself or send directly to the appropriate folder in my Dropbox account. I then kiss that annoying piece of paper goodbye.
The maintenance task of scanning and filing electronic receipts is typically something I do on a monthly basis. For me, this is the ideal frequency for batch processing a backlog of scanning work without feeling overwhelmed by the volume.
4. TAX ORGANIZING MADE SIMPLE WITH THE GODADDY BOOKKEEPING APP
As a business owner, I like to have up-to-date information regarding my company’s financial information at my fingertips at all times. This enables me to clearly see where the business money is being spent, what my profit/loss cycles look like over the course of the year, how much I’ll have to pay in estimated taxes each quarter, etc. Having access to this data enables me to make good decisions.
I use GoDaddy Bookkeeping as my accounting program, and the accompanying GoDaddy Bookkeeping app to have access to my information on my mobile devices. It imports and organizes all of my business account information into a central location and enables me to generate income and expense reports.
The beauty of this application is that there is very little manual data to input, since it pulls transactions directly from my bank account. The one exception is my mileage data, which I enter manually from the report I generate from MileBug on a monthly basis.
I invite you to test out one or more of these apps in order to make organizing your tax information a less taxing process for next year!