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Making the Taxes Simple: Tax Tips for Receipts and Expenses

Making the Taxes Simple: Tax Tips for Receipts and Expenses

Tracking the expenditures can assist you in saving your money at the tax time. But it is necessary that you keep the receipts as well as the documentation to back up the expenditures and justify the deductions in case essential. Follow the tax tips for receipts and expenses in order to make the taxes simple.

Check-in Monthly

There is the best way in order to keep the receipts and expenses for checking in on regular basis. It means that you will avoid sitting down in order to do the taxes during the season of taxation and also realizing the need to track down the months-old documentation. Purchase the color-coded folders for storing the receipts and the documentation. Hence you could easily find out the documentation that you want later. These folders may include:

  • Office and home expenses: receipts; gas, electricity, and water bills; maintenance, home repairs, and renovations; phone and internet bills.
  • Vehicle expenses and its mileage: fuel and gas costs; vehicle maintenance and repairs; receipts for the registration as well as licensing; the tires; lease or rental statements; business and personal miles driven.
  • Education costs: student fees, tuition, textbooks and some more required equipment.
  • Childcare expenses: pay for the stubs showing the childcare payments through the reimbursement account at your work; the receipts for childcare when you were doing some charitable work.
  • Medical expenses: the health insurance premium for you as well as your family; out-of-pocket expenditures.
  • Other expenses: charitable donations; the moving costs; work uniforms; tax planning and investment expenses; laundry or dry cleaning for uniforms and more work-only attire; the business supply (paper, pens). The category of the expenses (unreimbursed employee, moving, tax/investment planning expenses) could be deducted as the itemized deduction that is subject to two percent of the adjusted gross income by the 2017 tax year. For the tax years that begin with the year 2018, these two percent of the deductions are no more permitted unless they’re some business expense.

Organize the new receipts which are from a previous month into a correct folder (that include checking for the receipts that are lost in the bag or wallet) to make it sure that all the deductions are just accounted for.

Suck kind of system keeps the workload quite manageable. Hence you might organize as well as store your documentation without just feeling overwhelmed at the time of tax. It also provides you one chance in order to make the relevant notes on the receipts—just like which client that you met at the soon-to-be-deducted power lunch—whereas details are fresh in the mind.

Keep Paper and Electronic Backups

When, you will need to hold onto the paper receipts in order to document the expenses. But the receipt might get damaged or lost, or fade with the passage of time. You need to protect the receipts as well as other documentation by keeping one digital copy of the expenses. It could be as easy as:

  • Scan the receipts in order to store as the images or in PDF form, or ask to email them to you in case that is an option
  • Keep the electronic rent receipts
  • Save the PDFs of all the utility bills

You must check in on an electronic documentation that you have as a part of the regular check-in in order to make it sure that you have the digital backup of each and every receipt before you put those into the long-term storage.

Document Expenses on the Go

In case an evening is spent in scanning all of the receipts is not an idea of fun. You need to consider tracking the daily expenses on the go. You need to take the pictures of the receipts in order to create the digital backup at a point of sale. Now just import those and thus organize these during the monthly tax check-in.

There are few budgeting apps that include the support in order to organize as well as store the photo receipts including Mint.

Back Up the Information

You must back up the digital receipts on regular basis to cloud or the external thumb drive hence you are just covered if the hardware or software fails.

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