Monday, January 13, 2014

Organizational Tip #11 - Using Technology to Make Filing Taxes Easier

After the first of every year rolls around, many people quickly start thinking about their taxes.  Whether you are looking forward to a return, or feeling the pressure of filing your business taxes, there are ways technology can help you be better prepared when the fifteenth of April rolls around.  Some of these tools are costly, while others use software you likely already have.

  1. Keep EMail Receipts - There are many items throughout the year you might receive email receipts for such as continued education classes, magazine subscriptions, online orders for tools, books, and supplies.  To keep track of these more efficiently, create a sub-folder in your email Inbox named Taxes.  Whenever you receive an email receipt for items you can claim on your taxes, move them directly into this Tax folder.  A benefit of keeping the receipts together in one location is that they are easy to find at the end of the year and can be printed all at once.  This reduces the likelihood of misplacing them during the year or wasting resources printing them again.  Lastly, knowing how to quickly find the receipts at the end of the year is an invaluable time saver.
  2. Scan Receipts - If you have an all in one printer, a scanner, or a receipt scanning device, scan pertinent receipts for tax deductible expenses throughout the year.  Example receipts are medical expenses including medications, non-reimbursed expenses related to your job including travel, continued education classes, required tools and more.  While a receipt scanner will usually provide software to help you organize the types of receipts you scan, a regular scanner can work just as well.  Create a folder with the tax year in the title, then create sub folders for each category of receipts.  As you scan each receipt be sure to save it to the appropriate titled folder which will save time later.  For best results, scan all accumulated receipts in regular increments, like at the end of each week, or the first of every month.  In other words, choose a recurring schedule that normally works for you so you have the best chance at being successful.  Also, pick a time increment that is appropriate for your lifestyle.  If you generate twenty-five receipts each year, entering receipts quarterly or twice a year would be appropriate.  On the other hand, if you generate twenty-five receipts each month, it would make more sense to enter receipts once a week or month so they do not get overwhelming.
  3. Use a spreadsheet when receipts are not present - During the year there will be plenty of things that can be claimed on your taxes that do not provide or generate receipts.  This is where a spreadsheet program comes in handy.  An example would be keeping track of donations made to charities.  While there are requirements for charities to provide receipts to people who donate, you can find yourself missing a receipt come tax time.  Receipts can come in the form of email if you have registered your email with the charity, post cards, letters, and statements at the end of the year.  Luckily, you can also use a copy of your original check or a print out from your bank account or credit card showing the donation if you do not have a receipt from the charity.  In a donation spreadsheet be sure to keep track of the date you made the donation, the charity, the payment type, a check number if applicable, and if you have a receipt or not.  Ideally you would enter these receipts into the spreadsheet with a frequency similar to scanning items.  At the end of the year, you will already know which receipts are missing and will have enough information to quickly print out copies of checks as proof of your donation.  Spreadsheets also come in handy if you do not have a scanner and do not want to purchase one, as you can use them to keep track of all the same information listed in the scan receipts section.


One of the most important tips for staying organized is to stay in front of the things that can easily leave you feeling overwhelmed.  Keeping documentation relatively up to date will prevent certain monotonous tasks from feeling as overwhelming which will increase your likelihood for success.  The tips listed above are examples of how different types of technologies can be used to help you organize and track your expenses throughout the year to get the most out of your tax refund. 

As always, we hope you find these tips helpful!

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