4 Tips For Organizing Your Receipts

January 15, 2021

Receipts are a tax time essential because they provide proof of expenses. If past tax seasons have included searching frantically for old receipts, use this guide from your Los Angeles accounting service to organize this year’s receipts easily and efficiently. 

Document Everything Related to Each Transaction

Keep records of what the transaction entailed to simplify tax prep. For example, say you went on a business trip to attend a socially-distanced trade show in Los Angeles. Write down every transaction involved with the flight, including the airfare, any food and drinks you purchased, and all other costs. Every expense requires documentation, including those involving other people. For example, if you attended a business lunch recently with three potential clients and paid the entire bill, write down who was there and why you met with them in addition to how much you spent. 

Check Receipts on a Monthly Basis

Streamline the receipt organization process with monthly checks. Separate receipts for child care, medical, vehicle and mileage, home and office, and education expenses so long as they are applicable. Other potential expenses to keep receipts for include charitable donations, moving costs, mortgage interest payments, cleaning costs for work-related clothing, and office supplies. Office equipment also counts, such as the new laptop you bought for your home office. You can deduct the entire cost at tax time. 

Scan All Receipts

Have paper and digital copies of receipts available, especially since paper receipts are made with thin paper and can sustain damage or fade. Scan all relevant receipts as either images or PDFs, and make copies of all electronic receipts, such as those for mortgage interest payments. Check electronic versions every month to ensure there are no issues, such as one that did not scan correctly. 

Organize By Month

Save yourself tax time stress not only by working with your Encino tax consultants, but by organizing all applicable receipts by month. Referring to receipts becomes much easier when you know what month you’re dealing with. Use a color-coded system if it helps you, or simply create folders for each month.
Get tax help from Wallace and Associates, your Los Angeles accountant service.