Arranging Your Receipts Properly Before Tax Time

Arranging-Your-Receipts-Properly-Before-Tax-Time

After over a year of transactions, we collect hundreds of receipts. Usually they are in paper form but with online transactions now readily available, we also can collect digital receipts. When tax time nears, your anxiety grows as you know you’ll have to take time to sort your pile of receipts that somehow got bigger as the year went on. Prevent that anxiety next time you do your taxes. If your receipts are organized, you will be able to do your taxes so much faster and better. Here are some things you can do to stay on top of your receipts.

  1. Find your stashes of receipts in shoeboxes, desks, cabinets, in your mail inbox, or in the glove compartment of your vehicle. Useful receipts are the ones you need for that tax year. Don’t count out any receipts from your business dealings. Everything is useful just in case they are tax deductible.
  2. Once you have found all your receipts, divide them into different categories depending on where you got them from. If you have your own business, tax deductible items can be categorized into the following: advertising expenses (what you pay to promote your business in newspapers, television, billboards, posters, etc.), vehicle and business travel expenses (gas receipts, airline or train tickets for business travel), insurance you pay for your business, fees you paid for your lawyer, office supplies (paper, stationery, copiers, phones), expenditures for maintenance (plumbing, cleaning, landscaping), business meal receipts, and the money you paid for power and water to help run your offices. Plastic file folder pockets are best to hold receipts in so that they don’t fall out and go missing. Make sure you label each category clearly on the file folder tabs.
  3. Have a separate folders for your important personal and business receipts. You can buy different folders on a budget at dollar stores. You don’t need to print out online receipts but keep them in a file on your computer and add the scanned receipts to those files.
  4. You can scan your receipts now and you can organize them in digital files but keep the hardcopy in case auditing happens. There are programs available that can speed up the process of sorting out your receipts after you scan them in digital files. With those programs, the computer sorts the scanned receipts automatically fast. Basically the sorting that would take you about a week can be reduced to a few hours!
  5. Personal receipts usually can be thrown out or are useless to save unless they are for items like appliances, clothing that you may want to return, or furniture for the house. Grocery receipts can be thrown away after looking at them for accuracy or after you wrote down what you needed for budgeting purposes. Personal restaurant receipts or personal gas receipts can be thrown out as well. Now store-owners ask after you’ve made a purchase if you’d like a receipt. You can say no if the purchase was only for personal reasons. If you want to make sure what you paid was accurate later, you can check your banking records and it will show you how much you’ve spent and where you’ve spent your money.

It’s not a fun job to look for receipts and sort them, but in the end when you have to file your taxes, it will be easier to find your tax deductibles and you’ll get the maximum amount of money back from those if you have all your receipts. Get help sorting out your receipts by having Accountancy Services do your accounting for you.

< Back to our Professional Accountants page