Online services can make tax season smoother
If you're like me, you waited until the final days of the tax season to file your returns. And if you're like me, you're thinking there ought to be ways to keep your finances organized throughout the year to avoid the mad scramble as April 15 approaches.
As I procrastinated on my taxes, I researched several Web services that can help make tax season smoother next year by helping you track expenses, charitable contributions and other financial data.
A good starting point is this free service from Intuit Inc., which also makes the TurboTax software for preparing returns. (You're free to use a competitor to file taxes; there's no syncing between the two.)
Create an account, add your financial accounts, such as credit card, mutual fund and PayPal, and Mint will automatically pull transactions from those accounts.
Credit card transactions often will have a category assigned, based on the merchant. You can change that or add tags such as "taxes" and "charity." You can also manually add transactions paid in cash.
For me, the most time-consuming aspect of tax returns is gathering the records for deductions. Mint can help.
Take medical and work expenses. Tag credit card and check payments as "medical" or "work" throughout the year. Add those you pay by cash. Then when tax time comes, you have the records right there. If you get money back from your insurer or employer, tag those payments as well. You can calculate the net spending when you prepare your returns.
Same for charitable contributions: tag credit card and check payments as "charity," add those you pay by cash, and keep in mind the IRS requires receipts in some circumstances.
Expensify lets you submit cash transactions by photographing a receipt with a camera phone, uploading a scanned image from a computer or emailing a receipt. It will automatically pull relevant data, such as the date, merchant and amount. If the receipt matches a credit card transaction in the system, the two will be linked. That way, you can have the itemized receipt from the drugstore handy when you go through your deductions.
The service is free for the first 10 receipts. After that, it's 20 cents each. To avoid the fee, you can manually enter data. Free apps are available for Apple, Android, Windows Phone and BlackBerry devices.
If you have stacks of paper receipts, consider Shoeboxed. It doesn't pull data from your financial accounts, but it lets you mail in receipts for scanning. Like Expensify, the important data get pulled in the processing. But the service can get expensive -- starting at $99 a year for plans with mail-in options.
Add the odometer readings at the start and end of your trip. Or have your phone track that using GPS as you drive, but be careful about draining your phone's battery and data plan. Either way, MileBug calculates the costs, based on the IRS' rates. There's room to add expenses for parking, tolls, lodging and meals.