How to Organize Your Small Business Taxes and Maximize Tax Deductions
Whether you work alone as a freelance contractor or own a small business, organizing receipts to back up tax deductions can get overwhelming. But, if you miss any digital or paper receipts, you’re leaving money on the table.
This guide explains the tax deductions you have coming and how to organize paper and digital receipts in one place while having tax data extracted for you.
Keep These Receipts for Income Tax Deductions
Here’s a rundown of the receipts contractors and small business owners need to file income taxes and get the deductions they have coming. Getting organized for income tax reporting is a hassle, and your time is better spent serving clients or selling products. Consider a solution like Shoeboxed. We not only store digital copies of your receipts, but we also automatically extract the data you need to back up tax deductions.
If you drive a vehicle you own or lease for business purposes, you can deduct the standard mileage rate (currently over 54 cents per mile). The Shoeboxed mobile app tracks miles for you so you don’t have to worry about keeping a log. We document trips and total miles with the latest standard mileage rate. Shoeboxed also gives you instant documentation for this tax deduction.
Save your receipts for maintenance, repairs, fuel, insurance and registration costs during the time you use a vehicle for business. Upload these receipts to Shoeboxed and the tax-related data will be extracted from each receipt. You can then create clean reports for you or your CPA to use to complete your income tax return.
Business Travel and Meals Expenses
Whether you spend time in coffee shops to get your work done, meet clients for lunch at a restaurant, or travel and stay in hotels for business, save those receipts! Expenses incurred at conferences and other venues you travel to for work also count for this tax deduction.
- Hotel, motels, Airbnb or other rentals
- Car rentals, Uber or other ride services, taxi fares
- Air, bus or train fare
- Event registration costs
- Room service or restaurant meals, grocery receipts if you prepare your own meals
- Incidental expenses
Home Office Deduction
Many individuals who work from home believe they will get audited if they take the home office deduction. However, the chances this will happen are actually pretty slim. Keep home office expense receipts on-hand to back up the tax deduction that’s rightfully yours.
- Mortgage interest from Form 1098 from your lender
- Homeowners insurance bills paid over the year
- Electric, heating, water and any other utility bills
- Repair and maintenance expense receipts directly related to the office space, not including decorating
"Keep home office expense receipts on-hand to back up the tax deduction that’s rightfully yours."
Shoeboxed isn’t just for receipts. You can upload the 1098 or any document to save it along with your other income tax-related items.
Still stressed about tax season? Check out this guide to a painless tax season.
Know the Tax-deductible Small Business Expenses You Could Miss
Some tax-deductible expenses are obvious, like office supplies and computers. But, there are many other small business deductions that are often missed. Remember, each deduction you forget costs you money that you could be putting back into your business. Hold on to those receipts for any expenses directly related to your business.
- Cell phone and internet service.
- Insurance, including an umbrella policy for home office.
- Advertising, social media ads, logo design, marketing videos and website or brochure design.
- Subcontractor fees.
- Business loan and credit card interest.
- Insurance for storage or office space.
- Legal or professional fees.
- Equipment rentals and maintenance.
- Excise taxes and franchise fees.
- Business-related gifts, website hosting, association dues, credit card processing and more.
"Remember, each deduction you forget costs you money that you could be putting back into your business."
PS, if you’re using Shoeboxed to track your business receipts and other documents your subscription itself is tax-deductible.
Get Your Tax Documents Organized
You probably have paper receipts stowed away for tax time, and digital receipts in your email or stored in online accounts. Getting every tax deduction you have coming is much easier when you have all your freelance work and business receipts organized in one place.
You can print digital receipts and organize them in a file with the paper receipts and statements. While this is effective, it’s time-consuming, and it takes more time to add up the expenses later.
"Getting every tax deduction you have coming is much easier when you have all your freelance work and business receipts organized in one place."
It’s easier to use Shoeboxed to upload and organize your receipts. Shoeboxed doesn’t just store documents and receipts, we also extract the date, amount paid and payee for you. The data also gets verified by a human from our team, so you can be confident the numbers are correct. Shoeboxed can organize each receipt by one or more business or tax-related categories to make it easy to create reports and find data you need.
Sending Receipts to Shoeboxed
You have five options to get receipts or other relevant documents uploaded to your Shoeboxed account. Just choose the easiest method for each type of document, and Shoeboxed’s technology will find the date, total and vendor name, then store that data after a human verifies accuracy. The app also assigns categories to receipts to make reporting easy. You can edit any of this information, but you probably won’t have to.
- Snap a photo with the mobile app.
- Find receipts stored in your email and forward them to an email address Shoeboxed.
- Download receipts in jpg, .png, pdf, .gif or ti formats from merchant websites. Select all files at once and drag and drop to the online app or use the upload tool.
- Use a scanner for each receipt and save it as one of the file types mentioned above. Drag and drop or use the upload tool in the web app.
- Use a Magic Envelope and let Shoeboxed do all the work for you. You can place all receipts in the Magic Envelope Shoeboxed provides, then mail it to Shoeboxed postage-free to have the receipts processed. Receipts get returned to you in the same order you send them, so you keep a physical copy and an online copy.
Keeping Tax Deductible Receipts Safe
Shoeboxed stores all receipts, statements, 1099s and any other items with bank-level data encryption for security. Your data is backed up to an additional secure and undisclosed source. Documentation can’t get destroyed by natural disasters or equipment failure. Shoeboxed is TRUSTe certified, too.
Shoeboxed Data and Your Tax Deductions
Shoeboxed finds tax deductions and makes number crunching easier. After extracting the data from each receipt, Shoeboxed can create reports that do the math for you. Since receipts get categorized, you’ll be able to find, for example, all home office receipts and create a report with totals in a few clicks. Save reports as a PDF or in a format for more in-depth analysis in a spreadsheet.
Most accountants prefer working with the accuracy of digital files. Whether you complete your tax return or have a professional do the job, Shoeboxed reports save time while ensuring the numbers are correct.
Shoeboxed stores receipts, business cards and other documents in one easy-to-access secure cloud-based account. Use the mobile app to track business mileage, and Shoeboxed is your all-in-one tool for getting every tax deduction you have coming.