Keeping track of deductions

[Calypso]

I picked up this tip on another board, and thought I'd pass it on here. I'm terrible at keeping track of my tax deductions for my writing business, and I end up overpaying on my taxes because of it. I am just bad about writing things down in a ledger.

However, someone suggested to me that I keep a box and simply toss writing-related receipts into it. That way, I don't have to worry about recording them. Sounds like a good plan to me.

[randomthoughts1875]

That is a great idea! I bought a huge accordian file for just that purpose and it's made a huge difference! Isn't it funny how some of the simplest ideas are the biggest problem solvers! Thanks for sharing!

[SageMother]

That is a good idea. People get bogged down in how the filing system looks as opposed to ease of use. You are more likely to use the box because it requires very few steps.

[Melizzy]

Yep. I actually went to Sam's and bought a big box of manilla envelopes (the small ones), and labeled each one for the month and what part of my life it was for. I toss all receipts into them and voila, there you go!

[mamab]

I just have file folders that I put receipts in every month. I get a new one each month, file the old one. It's worked quite well. Then, when tax season rolls around, I can quickly sort them into categories, and make spreadsheets to total things up.

And, don't forget, if you use your personal car for delivering things, going to the post office, buying office supplies, etc. you can count the mileage as a business expense.

[taiarain]

If you have access to a scanner, you can also scan your receipts so you'll have electronic copies if the need arises.

I'm a huge fan of spreadsheets and have a wonderful workbook that I use for tracking my income/expenses/balance sheet. However, I always have a paper copy of every expense that gets entered into the workbook.

[moonmagick]

Simple is good. I am more likely to stick to it. Especially now with a baby in the house. Not always a lot of time for things like filing, but a box I can do.

[Melizzy]

Quote:

Originally Posted by taiarain

If you have access to a scanner, you can also scan your receipts so you'll have electronic copies if the need arises.

I'm a huge fan of spreadsheets and have a wonderful workbook that I use for tracking my income/expenses/balance sheet. However, I always have a paper copy of every expense that gets entered into the workbook.

Yes, I have done this as well for really big items or items that seem a bit obscure!

[mamab]

I never really thought much about using my scanner for scanning my documents. I guess that would be a good back up, just in case you lose something.