Being self-employed is a dream come true for many: there's nothing like being one's own boss, with the entire business under one's own control. But being in control of everything also means having to wear many hats and take care of disparate tasks, some of which are not as intuitive as others. And what dreaded chore sits at the top of the list of "un-intuitive tasks" for the majority of people? Keeping track of receipts and doing their taxes.
The Best Digital Filing System To Organize Receipts And Other Tax Records
The best tax receipt organizer for you is the one with features and solutions designed for your specific needs. Let's talk about why freelancers and independent workers are raving about Bonsai as the best app to track receipts for taxes.
Note: if you are looking for a hands off way to track and categorize your tax receipts, try Bonsai Tax. Users typically save over $5,600 on their tax bill with our receipt scanner app. Try a 7-day free trial of the Bonsai tax software. Our cloud-based app has no technical requirements other than having an internet connection to store receipts. It also comes as an app for Apple devices (iOS) and Android phones.
The Bonsai Receipt Scanner App Difference
At Bonsai Tax, we feel the pain of freelancers who just want to work on their clients' projects and not squander their precious time and energy puzzling over tax paperwork or receipts. Before receipt tracking apps, business owners used a 1099 excel template to track their deductions. We understand that many freelancers view this task as a necessary evil to suffer through -- and we want to strike the "evil" and the "suffering" parts from the equation while taking care of the "necessary".
Since credit card statements are sufficient for the IRS, the Bonsai Tax system will:
- Track your receipts or expenses by auto-importing bank, scanning credit card data, classifying receipts, and tracking those data online and through its mobile app.
- Automatically identify tax write-offs within your expenses, to avoid paying 1099 taxes and make sure you save as much money as possible when it's time to file.
- Provide quarterly tax estimates through analyzing your spending, so that you always have an idea of what you will owe at tax time.
A Financial Peace Of Mind
In addition to the cutting-edge features of the design and technology that make organizing tax materials simple and easy, the benefits of using the Bonsai Tax system also manifest in the increased financial peace of mind that comes with using trusted tax software with an accuracy guarantee, designed for the niche audience of You.
Bonsai Tax does more than calculations and record-keeping: it provides guidance to customers with minimal background in financial record-keeping. It walks its users step-by-step through the process of collecting, maintaining, and filing tax materials. You'll even be reminded when 1099s are due so you don't miss the deadline. However complicated and intimidating that process may seem, when you do it with the help of Bonsai Tax, you are not on your own!
Freelance work comes with enough stressors on its own: finding new clients, estimating the scope of each job, negotiating new contracts, staying on top of deadlines: that's plenty of pressure for a single professional to juggle! Some occupational stressors are unavoidable, but the ones that are -- like organizing tax records -- should be handled with the minimized hassle.
Let Bonsai Tax make your life easier. Sign up for a free trial and experience the relief of having an easy time doing your taxes and the satisfaction of getting more time to do the work you love. Try our receipt software today to track expenses and see for yourself why freelancers call us the best receipt scanner app.
Bonsai Tax's Receipt Organizer Is A Modern Necessity For Freelancers
For many freelancers and creatives, organizing and filing tax materials is the most daunting, anxious, and confusing part of the job. It makes sense: freelancers may excel at what they do professionally, but many have neither the educational background nor much experience in running a business.
Small businesses with few employees are also vulnerable to "dropping the ball" on keeping receipts for taxes. Paying attention to keeping records can get lost in the daily shuffle but, come "tax time" in April of each year, there can be hell to pay for those who neglected it.
In "Death And Taxes", Nobody Likes A Surprise
Unlike working for someone else, working for oneself means paying taxes at the end of the year, as opposed to getting a refund check. Those who fail to maintain proper receipt-keeping often feel "ambushed" with unforeseen sums they owe to the IRS after the tax return. Such "surprises" would be avoided if those professionals kept track of their income and expense tracking in a systematic way.
If your vote is for the easy / non-stressful way to do business paperwork, you will benefit from signing up for Bonsai's receipt organizing app.
Not Your Ancestors' Tax Receipt Organizer
If the notion of doing taxes for your company summons in your imagination a cartoonish scene of an entire office being literally buried under a pile of cascading papers, it is because, until recently, this unpretty scenario was not far from reality for most small enterprises.
You see, paper receipts are a thing of the past.
Mercifully, modern technology is here to prevent such hard-copy paper receipts chaos from sucking up busy professionals' time and mental health. Rows of physical file cabinets full of folders can now be replaced with a single digital filing system.
The biggest improvement brought on by new tax-related software is that it has both, organizational and executive functions to help the freelancer/self-employed worker. Bonsai is the best tax software for freelancers. We can take over the number/data crunching when it's a tax-filing season.
Note: if you are looking for a hands off approach to tracking and organizing your receipts, try a 14 day free trial of Bonsai Tax. The average user saves $5,600 on their tax bill! Get started today and see how much money you'll save.
Receipts Bonsai Tracks For Freelancers
For self-employed individuals, business expenses come in a variety of forms. Those working from home must take extra care to keep the "business expenses" category separate from "personal purchases" category -- ideally, by keeping a separate business bank account. Here is just a sampler of the most common 1099 deductions a freelancer could claim if they organized their receipts properly:
Office space rent
A freelancer working from home is entitled to writing off a reasonable amount of rent as a business expense (at $5 per foot for up to 300 feet of space for home office). You could also claim the actual expenses of your running your home office. Claiming this on your taxes has gotten a bad reputation but the home office deduction audit myth isn't true.
Any electronic device/tool a freelancer uses for work, from a computer purchase to a smartphone to a digital camera may be eligible to be written off with a receipt.
Maintenance/repair of the "tools of the trade"
Computers, cameras, printers and other essential devices the freelancer relies on for running their small business may break and require fixing: these costs can be written off for tax purposes.
Internet / telephone bills
Most freelancers rely on the internet and cell phone services to run their businesses and if these services come at the freelancer's expense, a percentage can be used as a write-off.
Any supplies/materials purchase that contributes to the running of a personal business such as writing instruments, stationery, ink cartridges, dry eraser boards, etc. are eligible as tax deductions. Furniture used exclusively for professional purposes, such as desks and chairs, can also be written off.
If you drive for business purposes, you should track miles for taxes. Some industries necessitate travel and, as long as these expenditures have a direct connection to doing business, freelancers can claim them as tax deductions. If you want to record your deductions automatically, try an expense tracker for travel write-offs.
Most modern businesses, large and small, need an online and print presence, like ads and social media activity, to find and reach their target customer audiences. These costs directly contribute to the success of the business and are tax-deductible.
Sometimes freelancers must outsource certain aspects of their workload to other independent contractors. Paying someone to build the company website, write content for it, or design a logo to put on merchandise counts as a business expense that can be written off.
Legal / professional services
Likewise, if a freelancer hires lawyers, accountants, or other consultants that help them make decisions about their business, it can be a tax write-off.
Taking courses and attending conferences related to one's line of work is considered a business education expense that must be reported to the IRS. Membership dues one pays for being a part of a professional organization can also be deducted.
Social networking and taking out clients for drinks and meals to discuss projects is, for many freelancers, an essential part of soliciting work. Deducting these expenditures is common practice, though there are rigid limits set by the IRS on what qualifies for a business meal deduction: the price of such a meeting should never be extravagant.
It is worth noting that the IRS needs you to provide original receipts for taxes related to purchases or business write-offs over $75 (and all travel lodging, regardless of amount) when you file your taxes. The receipts that count with the IRS are digital documents that come from credit card or cash purchases; however, bank statements are not accepted as they do not show itemized details for each charge.
This is why collecting and sorting receipts is so important: these records are not so easy to recover for tax purposes if lost.
The Major Freelancer "Headaches" Solved By Bonsai's Automatic Receipt Scanner
Truly, freelancers and small business owners have enough going on without the hassle of organizing receipts, keeping records of documents, and filing taxes. But, while they cannot repeal this necessity, they can at least control how much time and effort it should take to organize/file their taxes. For those who cannot afford to retain the services of a live accountant, an expense tracking organizer provides the best way to reduce hoarding receipts and stress. Try a 14 day free trial on the house. To name just a few reasons:
The Ease Of Use
Bonsai Tax's receipt scanning app streamlines record-keeping into a simple, user-friendly process that allows you to access and cross-reference your receipts without breaking into a sweat.
Apps that organize receipts save time in more than one way. In addition to allowing users to organize receipts quickly, these apps work best when the user updates them regularly, preferably as the receipts come in, therefore preventing large pile-ups that would cost the user extra time (and stress) at the last minute. Such apps also save the user considerable time by not having to file taxes "from scratch", with the app using the previously enrolled information to fill in personal data and all the necessary calculations into the tax return forms.
Providing Order And Clarity
With tax-related materials, it's important that there is no ambiguity as to what each receipt "means". This is why the organization is important: a smartly designed 1099 expense-tracker allows for clear categorization of each receipt/piece of information so that if / when the user chooses to proceed to file their taxes, the software is able to fill out all the necessary forms automatically.
Safeguarding Evidence / Data
Keeping hard copies of receipts organized is messy and demands space for storage. Physical storage is vulnerable to physical damage such as burns, spills, and the deterioration from humidity that can befall paper products. And sometimes, things can simply get lost and disappear, making you turn the whole office upside down (and still not find what you were looking for...).
But by using a cloud-based receipts method, the information stays in the same centralized, accessible-from-anywhere digital space -- and away from accidental loss or damage. So, it doesn't matter how long to keep tax receipts for an IRS tax audit, you'll be safe with online storage.
The Bottom Line
The bottom line is that regular, software-assisted tax record-keeping is good for the "bottom line". So many perfectly eligible deductions go unaccounted for because the receipts were thrown away, lost, or otherwise ignored for lack of organization and attention to such things. And that's real money out of the freelancer's real pocket!
When a freelancer commits to using a tax receipt tracking system, they benefit from not only having a tool that helps to sort/track the receipts -- but also from developing the psychological awareness and discipline of accounting for every relevant receipt. This combination, in no uncertain terms, translates into less money one has to pay (and, therefore, more money one gets to keep) for each tax year. Read why Bonsai is the best independent contractor app on the market.