7 tech tools to make tax prep less frustrating
by Kelli B. Grant
January 24, 2014
Just as e-filing has taken over mailed-in tax returns, other tech tools are making tax prep faster and easier. Translation: There’s just no excuse for handing your preparer an unsorted box of receipts and other documents.
“There’s a lot of opportunity now with consumer tools that your average taxpayer could use to get themselves more organized,” said certified public accountant Brian Tankersley, tech editor for CPA Practice Advisor.
Some of the most useful tax-related technologies employ apps. “A smartphone is easy for snapping a picture of a receipt and filing that away,” said Brad Spirrison, managing editor of app-review site Appolicious. But the information won’t live on your phone: Once users digitize their receipts and other papers, most programs let them track expenses across platforms and sync them with other productivity or tax-specific software.
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Possible organization benefits are threefold. Missing fewer deductible expenses may reduce tax liabilities. A pulled-together tax file requires less of your time sorting and tracking. Plus, less time on a preparer’s end, which could reduce fees. According to the National Society of Accountants, the average tab for an itemized 2013 federal and state return will be $261; $152 for non-itemized.
But even with newer technologies, taxpayers still face some work scanning, monitoring and tracking. “It’s like home exercise equipment,” said Tankersley. “If you don’t use it, it doesn’t matter what you bought.”
Miles driven for medical appointments, charitable endeavors and business meetings (if unreimbursed) may be deductible–assuming you remember to write down the details. Apps such as MileBug, for iOS, Android and Windows Phone, make it easier to track qualifying trips as you take them. Users can opt to have their trip tracked via GPS, or manually enter odometer readings to conserve battery life, said Spirrison. The $2.99 version of MileBug uses more detailed GPS tracking than the free, lite version. Estimated reimbursement is based on current IRS per-mile rates–and don’t forget tolls and parking.
The Internal Revenue Service’s free app for iOS and Android offers news updates and tax tips from the agency, but the real draw is its refund tracker, said Tankersley. Last year’s government shutdown has prompted the IRS to push back the opening of filing season from Jan. 21 to Jan. 31, delaying some refunds. “Tracking your refund online is going to be important,” he said.
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Instead of handing over a box of papers to your preparer, hoarders of receipts can send them all to Shoeboxed. “You actually sent the company your receipts, and they scan the documents for you and upload them,” said Danielle Cassagnol, a spokeswoman for the Consumer Electronics Association. (Users can also email documents, or send pics from their phone or tablet using the free iOS or Android app.) From there, add docs to accounting software or forward to your tax preparer. Prices range from $9.95 to $99.95 per month depending on the volume of documents and turnaround speed.
At its heart, this free iOS, Android and web app is meant to monitor your online purchases, monitoring your email for receipts to help you budget and to track the status of orders. But Slice is also a stealth tax tool–“It aggregates emailed receipts that might otherwise be forgotten,” said Spirrison. For example, charitable donations made online, or Amazon orders that included deductible items.
Receiving electronic statements may save paper, but the tax pitfall is that many financial institutions make only the last few months’ worth available–making it tougher to track back over the early part of the year for deductible expenses and other notable transactions, said Tankersley. Free cloud service FileThis, currently in beta, calls itself a “digital filing cabinet” for statements, bills and other documents. “It goes out and checks to see if there are statements available,” he said. Users can access those PDFs through Evernote, Dropbox, Google Drive or other avenues.
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What’s the going rate for a bag of gently used clothes, an old vacuum cleaner and a handful of hardcover books? Preparers say people tend to underestimate. Intuit’s free web and iOS app uses IRS guidelines to assign a fair-market value for noncash donations, as well as track cash donations and deductible mileage, said Cassagnol. Upload data to TurboTax, or export the data to send to a preparer.
Scanning receipts and other tax documents as you accumulate them can lessen the load in your filing cabinet and make it easier at tax time for a preparer (or you) to sort through, Tankersley said. ScanSnap models start at $199; there’s a $495 version that syncs with productivity app Evernote, and includes a year of premium access and storage. Another selling point: “The ScanSnap jams less than any other scanner I’ve used,” he said.