As you prepare to file your 2021 taxes (the deadline is April 17, 2022), being organized - having all your bills and receipts at hand - is essential.
It’s difficult to get organized at the last minute, so if you would like to maximize the deductions you receive and spend as little time as possible tracking down your tax receipts, be sure that your bills and receipts are easy to find. Whether you’re trying to organize your bills while you get started on your taxes or you want to get better organized before the next tax season, follow these three simple tips :
1. Categorize Your Expenses
While you prepare your taxes, you’ll find plenty of opportunities to receive a higher tax return through deductions. For example, daycare costs, charitable donations, and medical expenses are all tax-deductible items. However, it can be hard to deduct these expenses if you can’t easily find a record of all your payments.
To better track your spending and differentiate between non-tax-deductible expenses and tax-deductible expenses, categorize all your bills and payments by type - this can ensure that you can easily sort through them while filling out your taxes. For instance, you can use a bill-pay app to tag payments by type, separating your medical expenses, charitable giving, student loan payments, and other costs into their own categories. When it comes time to add up your tax-deductible expenses, you can review each category to find out how much you spent.
2. Take a Picture of All Your Receipts
With all the receipts that we collect during the course of a year, it’s not unusual to misplace/lose a few. During tax season, you don’t want to spend hours searching your home, wallet, car, bags, etc., for missing receipts that you need for a tax deduction. One of the best ways to protect yourself from losing a receipt is to take a picture of it as soon as you receive it.
After taking the picture, put it in a folder on your phone to ensure you have a digital backup of the receipt. Also, it’s a good idea to save a copy on your PC, external hard drive, in the cloud or on your favorite bill-pay app with all of your other expenses in the event your phone’s storage gets wiped.
3. Do a Monthly Financial Check-in
As the saying goes “the best preparation for tomorrow, is doing your best today”. So our third tax organization tip is to have a monthly check-in on your expenses. It does not need to be a long meeting, 10-15 minutes a month should suffice, and this is when you can leverage a bill-pay app to review and sort all of your bills and expenses in category-specific folders and save any physical receipts you might need for the next tax season. You can also use this check-in time to make notes about a particular expense, such as if you took a client out to lunch and want to remember to deduct the meal.
By devoting a small amount of time every month for a financial check-in, you’ll save time during tax season as you’ll be able to quickly locate particular expenses/bills you need to report on your taxes.
Prepare for Tax Season With the TiFiPay App
At TiFiPay, we’re committed to helping consumers better organize their finances and pay all their bills from one app on their phones. Since our bill-pay app also functions as a monthly bill organizer, you can upload pictures of all your digital or physical bills to the app, and our software will automatically sort and organize them. You can also tag all your expenses into specific categories, allowing you to quickly review your spending over the past year while you fill out your taxes.
We are launching our bill-pay app soon, but in the meantime, download our free promotional app!! This way you can stay up to date on the latest developments and have the chance to win up to $25,000 in bill pay credits!