While tax season is never fun, it doesn’t have to be the nightmare it often is for many people. If you barely survived this year, you need to take action NOW to ensure that next year doesn’t send you into the same stress-induced tailspin. Since the IRS can audit you up to six years after you file taxes, you must find a system for organizing and storing your receipts and other important financial information. Here are three ways to conquer your receipt clutter and take back your financial life:
- Use accounting software. Accounting software like QuickBooks offer a variety of services and products designed to make your financial life easier. Features like expense tracking, payroll, invoicing, and bill management can significantly reduce tax-related stress. QuickBooks Online offers three plans: QuickBooks Self-Employed, QuickBooks Accounting, and QuickBooks with Payroll (for businesses with employees). Prices range from $9.99 a month to $78.95 a month, but they offer deep discounts (up to 50%) for the first 12 months.
If you’re a service-based business, you may want to check out Freshbooks, which offers some of the same features and is exclusively designed for service-based small business owners like consultants, freelancers, and creative professionals.
Use plastic exclusively. Since most bookkeeping software packages can retrieve your account information and decipher it to some degree, you may want to consider using a debit or credit card specifically designated for your business expenses and eliminate your receipt collection altogether. However, there are some drawbacks to relying exclusively on your bank statements to track your purchases. Most statements don’t reveal specifically what you purchased, so it may be difficult to remember and categorize them when tax time rolls around. You can avoid this issue by annotating your expenses in your bookkeeping software on a monthly basis (then ditching the receipts), but you need to commit and stick to it.
Use a service. Regardless of whether you prefer to store or scan your receipts, you need to develop a system for organizing them. While snapping a picture with your smartphone is a good start if you want to store them electronically, programs like ShoeBoxed can make the process much easier. Shoeboxed helps you digitize and archive receipts, business cards, and other important documents in one secure place. You can submit them digitally by uploading images or submitting via email. If you’re a Gmail user, you can also sync your account to Shoeboxed and receipts in your inbox will be automatically uploaded. You can also stuff your paper receipts in one of their prepaid “magic” envelopes, where they will be scanned and pertinent information will be extracted from them, including the store/vendor name, total amount, payment type, last four digits of the card that was used, and the category (if applicable). If the algorithm detects any of the 15 default tax categories, it will automatically place that receipt in the default category.
You can choose from six different plans, ranging from the DIY Free Forever Option to the Executive (1000 documents/month) for $99.95/month (save 20% by paying annually instead of monthly). The free plan only allows you to process five documents (receipts or business cards) a month and you can only submit them digitally. The Classic plan ($29.95/month) allows you to submit up to 150 documents a month and includes the prepaid envelope service as well as QuickBooks integration. All plans allow you to manually enter and store as many documents you like with
While the pain of tax season is still fresh in your mind, resolve to start taking steps TODAY so next year will be a breeze!
Need a hand implementing these tips? Call Command Your Clutter at 727.420.1746 to schedule a consultation or email email@example.com.
Command Your Clutter is a professional organizer providing services in Clearwater, Palm Harbor, Tarpon Springs and Tampa. For more information, go to our web site www.CommandYourClutter.com
or call (727) 420-1746.