Jan 29, 2009
The Daily Poverty Post.
You are looking at a pile of receipts. Some of the receipts represent things Bossy will declare on her taxes, which is the last accountant-appointment-related thing Bossy wants to discuss.
Bossy has been a full time freelance writer for a few years, but she has never taken full advantage of the things she can write off her taxes. This probably goes back to feeling like a fake, and hello sweet therapist’s couch!
But this year, owing to her pop culture blog maybe you’ve heard of it, Bossy will explore tax write-offs in areas such as the home office, entertainment, and equipment related to her computer and camera.
The problem is that Bossy and her husband tend to be a wee bit disorganized in their collection of receipts. So recently Bossy had an idea, and this was it: collect every damn receipt.
Like, every.
Remove the tortured decision over which things apply and pocket that baby.
In a perfect world, Bossy collects those receipts and immediately places them in a manilla envelope marked by year — and when that is full, she’ll start a new manilla envelope marked by year — until she is buried alive by manilla envelopes, the end.
In an imperfect world — and no, the above example doesn’t already represent an imperfect world — Bossy’s carefully collected receipts
end up in teetering piles because she hurriedly prepares to go to a free concert at noon by dangling her messenger bag upside down and shaking, so it weighs less.
Bossy’s plan is that she and her husband can more intelligently comb through the manilla envelopes at a later time, like after they are both dead. But at least they will have all the receipts at their fingertips. Their calcified fingertips.
By the way, Bossy’s friend Amy thinks this is the worst plan she has ever heard during her eighty-five years on earth.
She’s all, “My husband puts his receipts directly into an accordion file with pre-designated categories such as car, gas, entertainment, and home office.”
But Bossy thinks she would never be able to keep up such a rigorous routine, where rigorous equals not napping on the sofa.
Bossy’s council? What say you?
Considering that I find the whole saving every receipt part to be a taxing exercise in itself (unless you consider the floor of my car an appropriate place for saving them), the whole accordion folder thing just would not happen. Period.
Oh, and I didn’t intend a pun with the whole “taxing” comment, but hey, if it works….
I could maybe go for one of the small accordion file things, but some things are just too hard to categorize and I probably wouldn’t be able to sort by anything other than the month of expenditure.
I used to create huge, terrifying, Seussish piles of filing by just putting everything in a box to file later. I dreaded doing my filing every single time.
The last time I cleared the pile, I decided I would file everything when it was handed to me, no matter what else I was in the middle of. Amazingly, I ‘ve stuck to it, and now I haven’t had a torturous, teetering pile of filing waiting to attack me when no one was looking for almost six months. So freeing!
So I vote for the accordion file IF you will use it. I wish I had better advice for making yourself use it. I’m not sure how I got through to myself on this one, honestly.
For the record Bossy’s Friend Amy is seventy-five – NOT eighty-five.
Bossy, I think that the accordion file or other similar system is the way to go. Put it somewhere convenient (maybe even have one for each you and your hubby, kept near where your wallets wind up at night) and you’ll use it. It also makes the whole going-through-the-reciepts thing much less duanting.
I throw everything in the envelop and organize it when my accountant is standing over me with a whip once a year.
Why, organizing it every day is just TEDIOUS.
I have much more pressing issues to tend to (blogging?)
My only advice is NOT to buy an expensive Neat Receipt digital scanner device, which will then sit and collect dust because it’s NEVER been used and there’s a wrinkled wad of receipts on the nightstand. (I’m looking at you, husband of mine.)
Instead of manila envelopes, we use standard white letter envelopes labeled for each month.
A plastic storage box with a lid, 14 hanging file folders labeled January through December, and label the last two “Important Papers” and “Health Insurance”. You still only shove receipts into a box, but at least they are sorted by month and you will not chip your calcified fingernails sorting through all of the receipts. In our case, “important papers” are report cards and warranties. I sue the “health insurance” one for those forms they send you showing what they are not going to pay and the bills the doctor sends you saying that it is still owed, but you can adjust this to anything you need close at hand.
I cheat. Absolutely everything goes through our checking account, and I use QuickBooks online, so every month (pretty much, or every couple of months if I’m busy) I categorize everything, the accountant has access online to QuickBooks, and I don’t have to worry about receipts (or my taxes, because he then makes sense of my categorizations). Because I’d throw them all in a folder, and probably lose the folder.
My husband has his own business and we hang an envelope by his workstation to put the reciepts in right away-these get changed each month. Then when we have time (April 14th) he reads them off to me and I put them in their respectable places on a spreadsheet. Previously we just handed a mess of reciepts over to the tax person…well, as you know, accountants charge a ridiculous amount of money for their time and it’s amazing how long it takes them to seperate and enter the figures into a general ledger/spreadsheet. WOW, did I just write my own blog?!
Sorry, being self-employed too, I agree with Amy. I put receipts into a pile and take 10 to 15 minutes a month to file them, so I don’t sort through them immediately. This is because I tend to collect them in my purse and wallet. But come tax time, I am a much a little bit happier that I don’t have to spend hours sorting through receipts, some of which I can’t remember what they were for.
one word.
wesabe.com
I saved receipts one year (the first year we were to be allowed to write off sales tax.) And then I took one look at the daunting box, and decided to estimate using my checking account ledger.
I have since added a column for categories and even set it up to automatically fill it (it’s not always right, but right often enough that I keep it).
Although I apparently still keep all my receipts, it’s not on purpose. Or contained.
Once-apon-a-time I was self employed, and kept a manilla folder titled “Business Receipts and Expenses” for anything I could dream of writing off…. but for all else? I enter my checkbook online, and categorize everything in my MSN Money program, and print that sucker off at the end of the year. Through the magic of computers, all my expenses are categorized and added for me, and itemized for me to gasp at.
Any tax related receipt goes into a file folder for that tax year. The rest of them get shoved into my husband’s desk drawer because he wants to be buried with every scrap of paper he has come into contact with during his lifetime.
I honestly TRIED saving my receipts. But I too have the giant piles of stuff waiting to be filed and they scare me. The fastest way to reduce those piles? Toss all the receipts into the trash! Ugh, I feel guilty even now about it, but I do what I’ve gotta do…
Oh, lawsy. It’s all hard. Just save ‘em in a [fill in the container] and bite the sorting bullet once a [fill in the time designation]. Then drink some cheap wine to help you forget.
But really, as a freelancer, you can have a write-off bonanza, so don’t let big faker syndrome or fear of organization stop you from whacking your tax bill down. Also, talk to yr accountant about looking over past tax years. Don’t know if it’s doable, but you may be able to go back and claim some sweet, sweet, write-offs for years gone by.
When I get a biz reciept, I write “taxes” on it, then shove it in a manilla folder (like you mentioned before). It’s actually not that hard or time consuming, and allows for maximum napping time.
I went to hear Peter Walsh from the Oprah show and Clean House speak a couple of years ago. He had a GREAT solution and I’ve been doing it easily ever since.
You have 1 accordian file with 12 months labeled in it. You only need a small one. Mine’s 10×6. You need to keep the file in a really easily accessible place. Mine is on the counter next to the toaster, where I usually throw my keys.
Whenever you have a receipt you just throw it in the correct month. Peter emphasized that the key is to not think about it – so don’t look at the receipt to analyze why you need it or not. Just put it in there. (Warranty’s should be kept separately)
Keep all receipts until taxes are complete. After that, say in May, you throw out last years receipts and put the new May month in. You never have more than one accordian file. And, according to Peter, you don’t need a receipt past 1 year. Of course, those receipts that you needed for taxes will now be moved into your tax info.
You’ll still have to go through all your receipts at tax time but you’ve collected them all year in a pretty organized, easy way.
I’ve been doing this for about 4 years now and it really works and is pretty mindless.
naps over receipts any day.
I love what Elizabeth in comment 20 said. It is much what we do and it is easy and fast.
Also, have you ever thought about checking out Dave Ramsey ? He’s super smart and very to the point.
You lost me at manilla.
My husband and I fight over who will put the crumpled restaurant receipt in their pocket to throw out later. Is that a valid method?
I say eff the whole receipt and write-off thing. Just focus on making more money.
I think my attitude aligns with The Secret. I think. I spent $20 on that damn DVD and didn’t watch it. But I’ve heard other people discussing The Secret. So, yeah, just focus on making more money and not on keeping track of what you spend.
I warned you not to let me into your poverty party. Heh.
XO
It’s taken years, but I’ve finally learned what I will and won’t do. I *say* I’ll file, but I won’t file.
Finally I found my solution. I bought a small (cheap) wooden chest-of-drawers, like a lingerie chest or something about 3′ high and a foot or so wide and deep. It has five drawers. I labeled the drawers ‘Receipts’, ‘Bills’, ‘Statements’, ‘Other’; and one for junk.
When I empty my purse or clear off the piles from the kitchen counters, I sort the stuff I need to keep into those drawers. At the end of the year I wrap each drawer’s contents in rubber bands and put them in a box, labeled with the year.
That’s about as complicated as I can handle. I prefer using Quickbooks to keep my checkbook. By categorizing as I go it’s really easy to get the figures for tax time, but you still have to have those receipts for proof.
Good for you, Bossy!
The other benefit of saving every receipt is that you can actually return that $5.49 item you bought at the hardware store that you don’t need instead of throwing it in the junk drawer because you don’t have the receipt.
I just throw them all in an envelope and run away. And by the time my wife (and business bookeeper) starts screaming for me asking what the F&@# is this!!!!!!!! IM long gone
I keep track of the reciepts for my step-FIL’s trucking business & organize them for his accountant every year. I get him to keep a manila folder for each month & then he gives them to me during his visits. Every single piece of paper that relates to money goes into it (including mail – card statements, cell phone bills, bank statements – Ev.Er.Y.Thing goes in the folder.) This works really well to help him remember / keep his truck clean / and get the papers to me!
When I sit down monthly to pay his online & by-phone bills, I also enter one month of his reciepts onto an excel spreadsheet. I break his down by meals / hotels / repairs / gas (ad nauseum).
Doing it this way only takes me about 2 hours every month (for bills & tax worth together). I figure doing this monthly saves me at least $40 in vodka from trying to enter everything at the end of the year. The man spends over $75,000 a year in gas ~ do you have ANY idea how many little reciepts that means!?!?! According to last year’s spreadsheet – it’s over 500 little pieces of paper. Oye, no wonder I need a new vision prescription!
I’ve started the same system for our family as well since my husband owns his own company & I made money with the blog this year
Not much, but enough to earn me a few more write offs!! Yeah!
OK, this is really simple.
If you want to give the accountant/financial planner a Laugh……. and a Nervous Breakdown, you need to store them in the one thing they fear most…
….a SHOEBOX.
They have some kind of collective phobia about those things…very odd really.
Do not fear the accordion file, Bossy. Toss the receipts in a basket each month until your credit card statement arrives. Then turn on some lively music and file as you check off each purchase. One hour later you are done and you are righteous!
The Mate is an independent filmmaker, and I’ve worked on projects with him where I kept the receipts for tax purposes. What an effing hassle. Here’s what worked, most of the time: I’d make a note directly on the receipt to make sure I knew what it was for, number it, and stuff it in a manila envelope. If I had the time, I’d write the receipt number and the item on the cover of the envelope, but often that got put off until later. Eventually, the items get logged in an Excel file and at that time they get coded by type so they can be sorted in Excel. To make that work, though, you have to have a system to decide which receipts to keep. MIght be worth a preliminary conversation with the accountant for some guidance on that. Now that that’s out of the way …. were you really looking for advice, or just some sympathy? Yikes, it’s a huge, huge hassle! Good luck!
amy’s plan is a sound one; GO FOR IT, BOSSY!
I am of the save everything and go through it once a year school. It is true that I can always return something, I never have to keep it just because I can’t find the receipt.
Hubby kindly asks that I save each and every reciept for checking it against the bank balance. Tedious, yes. But worthwhile.
ooo – I like 31 best! I do write TAXES on receipts that I need for filing, but I like that addition of category. Nice – so even if they are all in some messy pile, they have designation already! I also like 10 and 11 – I just bought quickbooks, so I think i’ll have to check it out. Spreadsheets are fast to tally as well…
Good luck Bossy!
I dont get reimbursed for anything unless I have a receipt,so I made myself get into the habit of EVERY TIME!!!!! writing what an item is for, EVERY TIME!!!! at the store or wherever I am. There is always a pen at the counter so if I do it there and then, I’m half way home; just write a brief note.
Hate doing it, but at the end of each month its worth hundreds of $.
Loved the George Z. Bush video.
I can’t believe they actually croaked the United States economy. Gotta go. Ma Jode just pulled up and is waiting for me. I’ll send a note from the orchards of Californee.
I used to save all of my receipts and carefully enter them into a budget spreadsheet. But that was before I became unemployed and realized I was OverSpending at a Frightening Pace.
Now, I shove all my receipts into my wallet and, when my wallet gets stuffed to capacity, I pull them out and throw them away. Ta-Dah!
What are these “receipts” of which you speak? Are they the white pieces of paper that are in the “cash” area of my wallet? And, what is this “cash” of which I speak?
“Lizzy”
The way your friend’s hubby does it sounds great, but with unorganized sisters like me, it doesn’t work.
Receipts? I haz none.
This council member says “get off the sofa.”
We have two folders for receipts: Deduction and Other. Anything that could possibly be viewed as a business, medical, or charitable wirte-off goes in the deduction folder. Everything else (and I mean EVERYTHING else) goes into Other.
I have given up many things in the name of frugality but I cannot give up my girl. She receives a mashed-up pile of receipts in a big manila envelope and makes magic out of them, then sends them to the accountant and then runs interference with him in explaining why we think things should be deductions. I love her and she saves us a ton of money in our real estate business. Bossy, you should have a receipt girl. They’re better than a pool boy.
Check out Frugality Gone Awry Fridays on my blog and add your story about something that jacked up your budget this week. http://www.hipandstingy.com/2009/01/frugality-gone-awry-fridays.html
Sorry, Bossy. I’m with Amy on this one. I think you have to save them in some sort of organized manner or they may seem overwhelming when you sort through them. Perhaps, you can consider sorting by categories as Amy does, by month, alphabetical, etc. I would go with whichever method is easiest to maintain and allows for expanding if necessary.
bossy…if i can clean my nasty house (ok, it’s not done yet, but i’m working on it), surely you can organize your receipts into an accordian file! i think it was bossy who once told me “it’s so much easier to maintain organization than to tackle a huge mess” or something like that