Unclutter Your Taxes

By MP Dunleavey on Friday January 29, 2010
This post is about taxes


dw_usa(To our loyal readers in Canada and abroad, we're striving to one day make emails like this relevant to you.)

OK, beautiful people. You've got 76 days until April 15th. Are you ready?

Probably not. We're not. So we coaxed Erin Doland, renowned as the Unclutterer, author of "Unclutter Your Life in One Week"—and featured by The New York Times yesterday, to share her personal paperwork organizing tips.

Taming Receipts—Help!

If you itemize (and if you run your own business you must), "the biggest challenge is capturing those receipts," says Doland. She relies on high- and low-tech options.

High: Neatworks is a receipt scanner with a ledger function that's a tad pricey—about $399—but pays for itself in sheer convenience, Doland says. Once receipts are scanned you can sort them into expense categories right in your computer. It makes itemizing a snap.

Low: Corral receipts in two Ziploc baggies in your purse: mark one for personal, one for business. Every month, put the Ziplocs into a manila envelope.

Spend 20 minutes each month reconciling receipts with bank and credit card statements to catch any missing expenses.

Organizing All Those Papers—Ugh

Doland's Swear-By Secret: If you're facing an unruly mess right now, ditch the "I don't have time to do it" excuse. It's true, you won't have 36 hours to spare on April 14th. You do have two and a half months now. "The best way to sort through papers and piles is to do an inch at a time, every day," says Doland.

It's not sexy, but there's a hidden benefit to the baby-step method: Studies show that "workers who are most creative alternate between mindful work and mindless work, like filing," Doland says. "It gives your brain a chance to focus on the mundane and recharge a bit."

Comments (6)add
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written by McKenna Rowe , January 29, 2010
Since I use an Amex Business Credit card for business purchases/expenses, it's extremely rare that I use cash. I can simply download a PDF report Amex's website with my total transactions from the year. No paper receipts or scanning necessary. I upload all documentation digitally to box.net, my accountant downloads and does the books, then sends me my tax return in the mail to sign off and mail out. I even pay her online for her services using Paypal.
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written by kateh , January 29, 2010
Very good tips - I followed the link to her site as well. Thank you for introducing me to a great new resource!
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written by AEB , January 29, 2010
McKenna, I'm with you. I intentionally only use my business card for everything business and therefore do very little with paper. Is it a good idea/possible to just organize your way out of receipts entirely?
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written by Abby , January 29, 2010
I don't have business expenses, but I do have lots of personal deductions (medical - kids Dr visits, prescription payments, charitable donations). I find using a credit card for all expenses (when possible) helps - my annual statement sorts out all my expenses for me. For medical payments, I keep my insurance statements, and check my bank statements for any checks that may be included in the above. All told, I save myself a few hundred dollars on my taxes this year (not enough to purchase a scanner, but still some nice padding in my bank account!)
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written by Joy , February 01, 2010
I'm also a fan of Shoeboxed.com and Outright.com for tracking business expenses and estimating quarterly taxes. Its free and super easy.
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written by MP Dunleavey , February 01, 2010
Thanks, Joy. I'm going to check those out too!
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