Tag Archives: organizing taxes

Make Tax Organizing Less Taxing with These 4 Apps

Tax Preparation

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 document 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. 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.

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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. 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.

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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.

Its Deductible app

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.

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3. 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.

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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 daily. When my schedule reaches “crazy” level, I might batch process a week’s worth of receipts at a time.

4. 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.

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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!

Want to learn more about Natalie Gallagher or Refined Rooms?  Visit www.RefinedRoomsLLC.com or connect via: Facebook | Pinterest | Twitter | LinkedIn

Organizing Charitable Donations Records to Reduce Tax-Time Stress

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We are swiftly approaching that dreaded April 15th tax deadline.  Are you one of the lucky ones who received a hefty tax refund this year?  If so, then tax preparation might be a distant memory for you at this point, since you likely completed your taxes back in February (so that you could get your hands on that big check ASAP).

I know that many of you, however, are currently swimming in 1040 and W-2 forms, trying desperately to bring order to a box of chaotic receipts. One of the most common types of receipts in that “box of chaos” is the charitable donation receipt for household goods.

Throughout the year, you corral a group of items you no longer need/want, such as this:
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You then bag them up and bring them to your favorite local donation site…

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…and you get one of these:

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Most people tuck this receipt away in a file folder (or the “box of chaos”) with the other donation receipts from the current year, never to think about it again until tax “crunch time”  descends upon them.  At this point, they are faced with the stress of a) attempting to remember the particular  items that correspond with each receipt, and b) assigning a monetary value for each donated item.  This can be a painful and time-consuming process if you attempt to accomplish this task in one annual “batch” session.  In fact, I know several people who don’t bother to track this information at all because doing the task on an annual basis is simply too time daunting.

Valuing these goods is important though, because you often donate thousands of dollars worth of items each year, which can translate into hundreds of dollars in tax savings.  If you completed a large decluttering or downsizing project during the year, you could end up donating tens of thousands of dollars worth of household goods.  In these cases, donations can result in quite a significant tax savings. Given the importance of this, I’d like to share a few tips for organizing your (non-cash) charitable donation records that will enable you to take full advantage of your tax deduction:

1.  Take pictures of your donated items

Taking pictures serves two purposes; it provides further documentation of your donated items in the event of an IRS audit, and it provides a visual accounting of your items that you can use for creating your own itemized receipt.

2.  Determine the value of donated items at the time of donation

 Make it a habit to complete the exercise of donation valuation on the same day that you donate your items.  Information regarding the condition of each item will be fresh in your mind, which will result in a more accurate assessment of the value. In addition, this habit will prevent you from having to carve out a large block of time near the tax deadline to complete the overwhelming task of processing a year’s worth of donation receipts all at once.

3.  Take advantage of existing valuation tools

In the past, I’ve referenced both the Goodwill Valuation Guide and the Salvation Army’s Donation Value Guide for determining how much my items were worth. Within the past few years, I discovered a few interactive tools that are useful for this purpose.  These include Goodwill’s Donation Receipt Builder, and most recently, Intuit’s ItsDeductible tool.

ItsDeductible is available as both a web application and a mobile app. It provides a means of tracking cash donations, mileage donations, and household goods donations.

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In addition to keep a running tally of the total value of the goods I’ve donated each year, ItsDeductible also provides a summary of my actual tax savings to date. Knowing that I’ve saved $127 so far on my 2014 taxes serves as strong motivation to stay on top of this process (it also reinforces the urge to declutter so that I can find more things to donate!)

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 4.  Attach the original donation receipt with your itemized receipt

ItsDeductible syncs directly with Turbo Tax, which is  a boon for Turbo Tax users.  It also generates useful summary reports as well.  For tax documentation purposes, however, it is best to keep an itemized receipt together with the receipt provided by the donation site.

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 5.  Store all donation receipts for a particular tax year together in a designated location

Whether you choose to scan your receipts and keep all of your documentation electronically (which the IRS now accepts), or you prefer paper records, the final step in the process is to designate a home for these receipts (as well as all of your other tax-related documents) to live until the next tax preparation season arrives. Completing your taxes is stressful enough without the added burden of having to go on a hunting expedition for all of the supporting documentation!

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What aspects of the tax preparation process do you struggle with the most? Leave a comment and I’ll add it to the list of future blog topics.

Want to learn more about Natalie Gallagher or Refined Rooms? Visit RefinedRoomsLLC.com.