My accountant called me out on my receipt system and I'm glad he did

I used to just throw all my business receipts in a shoebox. Figured I'd sort them at tax time. My accountant took one look and said 'you're leaving money on the table with this mess.' So I started using a simple spreadsheet every Sunday night. Costs me 10 minutes a week. At tax time last April I found $340 in deductions I would have missed. Anyone else have a system that actually works for tracking small expenses?

3 comments

3 Comments

the_nathan1mo ago

Had a buddy who swore by the envelope method. He'd write the date and amount on the back of every receipt right when he got it, then toss it in a labeled envelope for each month. Come tax time he just dumped all the envelopes out and tallied them up. Found out he was missing mileage deductions because he never wrote down why he drove somewhere. Simple fix saved him around $200 the next year.

rubyshah1mo ago

That whole "wrote down the date and amount" part is key, but I'd take it further. I do the envelope system too, but I also jot down the purpose of the expense right on the receipt. For mileage, I keep a small notebook in my glovebox and write the date, destination, and business reason the second I park. Saved me from guessing later. My accountant told me missing the "why" on a few trips cost me around $150 in deductions one year. So now I'm super strict about it, and it pays off every tax season.

kaih361mo ago

Write down the "why" or you're basically guessing at tax time. @rubyshah nailed it, that little extra step keeps the IRS off your back.