I have to admit to being busy last whole week due to the fact that I have been doing my taxes.
This year, I did things a little different. Since the IRS now lets you have digital copies of all your receipts, I decided it’s finally time to throw away all my files and receipts.
So, I “scanned” every one of my receipts and related-tax documents into JPEG image files, PDFs, and Word documents.
Well, think of it this way, how would you like to show IRS all your receipts and tax history on your Blackberry or just a flash drive?
I just did, all my receipts are stored digitally in my Blackberry 8830 and came out to about 50 megabytes for 2008. Not too bad right?
Having your receipts digitized will allow you to save paper too. Besides saving earth, you will also benefit from the fact that you can take ALL your tax records with you wherever you go. That means no more file boxes and whatnot.
If you can get yourself to scan every receipt and invoice you receive from today on, you will be able to take advantage of what today’s technology and laws have to offer.
So, here’s how you can digitize your taxes and your life too:
1. Get a scanner. There’s special receipt scanners too but if you already have a regular scanner like me, that will do.
2. Scan ALL your receipts. Name your files with the date first, then the tax classification such as “meals”, and where you bought something such as “Taco Bell” and the amount.
For example, if you ate Taco Bells lunch on 01/10/08 and paid $5.99 for your meal including taxes, name your file, 011008-meals-tacobell-5.99.jpg.
After doing many, it’d look something like this:
3. After you scan all your receipts and invoices, you can organize them into files that will neatly divide your records.
4. Make a simple spreadsheet for each tax classification and find out the total. For example, you can make a “meals” excel spreadsheet and list all the meals there.
5. When you do your taxes, you won’t be fiddling thorugh bunch of real receipts, you can actually do it anywhere you bring your digital copies.
6. If IRS wants to audit you, you won’t have to waste time fiddling through bunch of paper, just hand them a flash drive with all your tax records.
Trust me, digitizing will save you more money and time later down the road.
Well, I hope this helped you and even if you did your 2008 taxes already, start scanning everything so you will be ahead when the next year tax filing comes around.