Tech Tools to Keep Organized Next Tax Season
Free Book Preview Tax and Legal Playbook
Gone are the days of envelopes stuffed with business dinner receipts and piles of invoices, now you can keep everything you or your accountant might need for your taxes online and, in many cases, right on your smartphone. Tax season is coming to a close, but it's a great time to form habits for next year. We talked to entrepreneurs and tax experts about the digital tools that make their lives a little easier. Here’s what they suggest you check out.
Xero. This online bookkeeping tool is clean and easy to use and has apps for smartphones and tablets so you can access your account from anywhere. Xero's software allows you to check on your cash flow, import your bank accounts and credit cards and send invoices and receive payments online. “We use this bookkeeping tool to track and categorize expenses,” says Nick Kishfy, chief executive officer of Mojotech, a smartphone app development company. “One feature that's nice about Xero is that once we grew to a size that made it more practical for us to work with an accountant for than just ‘tax season’—this service allowed viewing and editing access for the accountants.” Xero also integrates with many other online services like Unleashed, an inventory software service.
Shoeboxed. Hate wrangling receipts? Use Shoeboxed’s smartphone app to snap a photo of your next equipment purchase or client meal. The app will scan for data (like the restaurant’s name and the payment type you used. A human at Shoeboxed will then verify it for accuracy before the digital service categorizes the receipt. You can even use it for mileage. Just click the “Go” button and click “Stop” when you arrive at your destination. Those with the premium service ($9.99/month), receive pre-paid envelopes where they can place paper receipts that Shoeboxed adds to your account. A tool like this that helps with receipts and mileage – and can sync with many online bookkeeping services – can be critical during tax time,” says Kay Bell, a tax expert and author of The Truth About Paying Fewer Taxes. “These are entries that the Internal Revenue Service looks at closely. If you just guesstimate, an IRS examiner is likely to want more information.”
Google Drive. Google’s popular cloud-based document sharing system Google Drive can be an integral tool to help you track costs and share spreadsheets. “It’s a convenient, access-from-anywhere way to keep a running tally of who has spent how much, when, where and for what purpose,” Kishfy says. He says it’s especially helpful if you’re on a company trip—those times when you’re racking up a lot of expenses. “People can easily upload their receipts to folders in Drive, so we can limit the need for big messy envelopes with crumpled paper tape after a conference.” The company’s accountant has access to these Drive docs so he can grab receipt copies without having to bother Kishfy or his staff.
FileThis. Tracking down your paperwork can be chore. Which is why freemium app FileThis grabs all your statements, invoices and receipts from a host of banking, insurance and utilities such as American Express, Chase, AT&T. You can store the documents on FileThis Cloud or forward them to other cloud storage providers like Evernote or Dropbox—and, most importantly, you can select a batch of documents and forward them right to your accountant. It can keep you organized beyond tax time, too. Says Greg La Follette, a CPA and vice president of product strategy at CPA2BIZ, “I recently had to check the warranty on my tires, so I just typed in BMW and the app instantly found the invoice for the tires I bought 2 years ago.”
TripIt. You might have used this digital service and app to track an itinerary, but TripIt can also double as a tax tool, documenting all your travel in one place. Forward all of your travel confirmation emails—including flight, hotel, ground transportation and even Open Table reservations so that you have a complete picture of each trip. “In tax examinations travel expenses are often challenged and without adequate substantiation they’re often disallowed in their entirety,” LaFollete explains. “But if you have everything in one spot, you can say to your tax preparer or an auditor, ‘Here’s the whole thing.’”