Common Tools Can Save You Time And Money On Taxes Business

Ideally, your computer and phone are already backed up to the cloud so that you can access your data if the devices are lost, stolen, or destroyed. If not, you want to make sure that at least your tax information is regularly transferred to a secure cloud storage system or other secure location offsite.

The key is to keep information safe and accessible, which means choosing electronics over paper whenever possible. Paper is bulky, inefficient, and vulnerable to all kinds of disasters, including fires and floods. Ink can fade, especially on receipts needed to document expenses (credit card or bank statements are generally not considered sufficient documentation without receipts).

“I typically say to business owners, ‘No receipt, no deduction,’ says Bob Fay, CPA in Canton, Ohio, who is also an advocate for consumer financial education for the American Institute of Certified. Public Accountants. “It’s a short message that goes with them because they have so much on their plate every day.”

But by the time the IRS asks for those receipts, you’re left with fragile, unreadable paper if you haven’t captured a digital version, Levison says.

Plus, paper documents can cost you more.

“People still literally give their CPAs a shoebox,” says Long. “What your CPA does then is pay one of their interns to scan all of this into their systems and they charge you for that.”