Tax season is upon us
It’s that time of year again, folks, where some people simply turn over their well manicured data to the government, while others sweat bullets over boxes of wadded up receipts. No matter your system, the complicated tax code doesn’t have to overwhelm – tracking claimed deductions is simple, and you already have everything you need.
William Olsen is a CPA and Co-Founder of Deductr, an online service and mobile app that helps small business owners track their business expenses and show them how they’re saving on their taxes. He lives and breathes this stuff every day, and he swears it doesn’t have to be difficult.
Olsen says it’s as easy as “remembering the 5 W’s for what to record for each claimed deduction: When, Where, What, Why and Who.”
“Let’s make this even easier,” Olsen tells AG. “The first three W’s are right on the receipt. These are the easy ones (the date of purchase, where you made your purchase and what you purchased). The only thing you need to put some thought into is the WHY. Just think of the “why” as the business purpose for the deduction. And in the case of a meal or entertainment expense, when describing your why, include WHO you entertained and you’ve covered what you need to substantiate your deduction.”
Maybe you’re not all that great at storing and tracking all of this information, just use their tools that allow you to record your why “on the fly,” taking pictures of your receipts right from your smartphone, which uploads it to the cloud for safekeeping. “Beyond having that part of your tax tracking done for the year,” Olsen added, “Deductr then provides you instant feedback on the effect your deductions have on your taxes as it monitors what you are saving in taxes in real time!”