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 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.
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. 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".
The Bonsai Tax system will:
Bonsai software is cloud-based and 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.
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 scanning app today to track expenses and see for yourself.
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 receipt keeping. 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.
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.
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. The software can take over the number/data crunching when it's a tax-filing season.
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:
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).
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.
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.
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.
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.
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 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 the 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.
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. To name just a few reasons:
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.
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.
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 audit, you'll be safe with online storage.
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.
A verbal contract (formally called an oral contract) refers to an agreement between two parties that's made —you guessed it— verbally.
Formal contracts, like those between an employee and an employer, are typically written down. However, some professional transactions take place based on verbally agreed terms.
Freelancers are a good example of this. Often, freelancers will take on projects having agreed on the terms and payment via the phone, or an email. Unfortunately, sometimes clients don't pull through on their agreements, and hardworking freelancers can find themselves out of pocket and wondering whether a legal battle is worth all the hassle.
The main differences between written and oral contracts are that the former is signed and documented, whereas the latter is solely attributed to verbal communication.
Verbal contracts are a bit of a gray area for most people unfamiliar with contract law —which is most of us, right?— due to the fact that there's no physical evidence to support the claims made by the implemented parties.
For any contract (written or verbal) to be binding, there are four major elements which need to be in place. The crucial elements of a contract are as follows:
Therefore, an oral agreement has legal validity if all of these elements are present. However, verbal contracts can be difficult to enforce in a court of law. In the next section, we take a look at how oral agreements hold up in court.
Most business professionals are wary of entering into contracts orally because they can difficult to enforce in the face of the law.
If an oral contract is brought in front of a court of law, there is increased risk of one party (or both!) lying about the initial terms of the agreement. This is problematic for the court, as there's no unbiased way to conclude the case; often, this will result in the case being disregarded. Moreover, it can be difficult to outline contract defects if it's not in writing.
That being said, there are plenty of situations where enforceable contracts do not need to be written or spoken, they're simply implied. For instance, when you buy milk from a store, you give something in exchange for something else and enter into an implied contract, in this case - money is exchanged for goods.
There are some types of contracts which must be in writing.
The Statute of Frauds is a legal statute which states that certain kinds of contracts must be executed in writing and signed by the parties involved. The Statute of Frauds has been adopted in almost all U.S states, and requires a written contract for the following purposes:
Typically, a court of law won't enforce an oral agreement in any of these circumstances under the statute. Instead, a written document is required to make the contract enforceable.
Contract law is generally doesn't favor contracts agreed upon verbally. A verbal agreement is difficult to prove, and can be used by those intent on committing fraud. For that reason, it's always best to put any agreements in writing and ensure all parties have fully understood and consented to signing.
Verbal agreements can be proven with actions in the absence of physical documentation. Any oral promise to provide the sale of goods or perform a service that you agreed to counts as a valid contract. So, when facing a court of law, what evidence can you provide to enforce a verbal agreement?
Unfortunately, without solid proof, it may be difficult to convince a court of the legality of an oral contract. Without witnesses to testify to the oral agreement taking place or other forms of evidence, oral contracts won't stand up in court. Instead, it becomes a matter of "he-said-she-said" - which legal professionals definitely don't have time for!
If you were to enter into a verbal contract, it's recommended to follow up with an email or a letter confirming the offer, the terms of the agreement , and payment conditions. The more you can document the elements of a contract, the better your chances of legally enforcing a oral contract.
Another option is to make a recording of the conversation where the agreement is verbalized. This can be used to support your claims in the absence of a written agreement. However, it's always best to gain the permission of the other involved parties before hitting record.
Fundamentally, most verbal agreements are legally valid as long as they meet all the requirements for a contract. However, if you were to go to court over one party not fulfilling the terms of the contract, proving that the interaction took place can be extremely taxing.
So, ultimately, the question is: written or verbal agreements?
Any good lawyer, contract law firm, or legal professional would advise you to make sure you formalize any professional agreement with a written agreement. Written contracts provide a secure testament to the conditions that were agreed and signed by the two parties involved. If it comes to it, a physical contract is much easier to eviden in legal circumstances.
Freelancers, in particular, should be aware of the extra security that digital contracts may provide. Many people choose to stick to executing contracts verbally because they're not sure how to write a contract, or they think writing out the contract terms is too complicated or requires expensive legal advice. However, this is no longer the case.
Today, we have a world of resources available at our fingertips. The internet is a treasure trove of invaluable information, platforms, and software that simplifies our lives. Creating, signing, and sending contracts has never been easier. What's more, you don't have to rely on a hiring a lawyer to explain all that legal jargon anymore.
There are plenty of tools available online for freelancers to use for guidance when drafting digital contracts. Tools like Bonsai provide a range of customizable, vetted contract templates for all kinds of freelance professionals. No matter what industry you're operating in, Bonsai has a professional template to offer.
A written contract makes the agreement much easier to prove the terms of the agreement in case something were to go awry. The two parties involved can rest assured that they're legal rights are protected, and the terms of the contract are sufficiently documented. Plus, it provides both parties with peace of mind to focus on the tasks at hand.
Bonsai's product suite for freelancers allows users to make contracts from scratch, or using professional templates, and sign them using an online signature maker.
With Bonsai, you can streamline and automate all of the boring back-office tasks that come with being a freelancer. From creating proposals that clients can't say no to, to sealing the deal with a professional contract - Bonsai will revolutionize the way you do business as a freelancer.
Why not secure your business today and sign up for a free trial?