Business Management

Kyle Flowers (US) - Faxes for Taxes: Five Time Saving Tips for Managing IRS Documentation

Now that you’ve received your 2011 W-2’s or 1099’s, it is time to get down to business and prepare for the filing process. Whether you do it yourself or hire a tax professional, you will need to gather essential documents such as bank statements, business receipts, mortgage payments, pay stubs, and charitable contributions. The process of locating and copying documents can be onerous but it does not have to be this way. Filing your taxes will be much less stressful and time consuming when you have everything you need conveniently at your finger tips.

eFax offers these easy tips to stay organized throughout the year and reduce headaches at tax time:

1.  Get Appy – Yes, there’s an app for that! An Internet fax service with apps for your mobile device will enable you to keep your expenditures organized whether you’re on the go or under tight time demands.  Photos of receipts taken with a smartphone’s camera can be faxed to you directly from your phone, organized with specific category tags and stored in the cloud. For example, while standing at the pharmacist counter, the receipt for a prescription can be photographed and faxed to a file folder labeled, “Taxes: Medical.” The paper trail is now in a digital format and easily retrievable for forwarding to your health savings account (HSA).  Using a mobile fax app, you can even send your tax support documentation to your accountant from anywhere at any time.

2. Tag as you go - Tag your faxes throughout the year with keywords. This will allow you to organize your faxes, and make it easier to find specific documents later. You can simply search for the tag name to see a list of everything that matches. For instance, if you purchased a computer, you can digitize the receipt with a mobile fax app and tag it as “office expenses” before you leave the store. This will enable you to easily search and locate all of your office expenses at tax time.

3. Find the Needle in the Cloud – The right internet fax service can make finding a document as easy as “Googling it.”  Set up your own folders in the cloud for storing documents, and then simply search to find a specific document or group of documents. Having an organization strategy at the beginning of the year will save a lot of time and headache when the time comes to retrieve critical documents and receipts from the cloud.  And, with an online fax service that offers lifetime storage, you can easily refer back to these documents anytime for loan applications, investments, insurance, and more.

4. Digitize Your Expenses – To avoid misplacing receipts needed for IRS documentation, scan them on a daily or weekly basis. Larger receipts can be cut it into pieces and taped to an 8.5 x 11 inch sheet of paper for scanning. This gives the scanner a size it recognizes. Once you start digitizing important receipts, use an Internet fax service to easily store and organize them into categories. Then all of your tax documentation can be quickly and easily found in one secure location.

5. Save on Space - Finally, remember to keep your records for more than a year. For audits, the IRS may request documentation for returns filed within the last three years. If you are a small business, payroll records should be kept for six years and records related to an asset should generally be kept for as long as you have the asset plus three years. Choose an online fax service that offers secure, lifetime storage for your faxes. That way you will never need to rummage through storage boxes hidden away in a dusty closet.

While tax season isn’t everyone’s favorite time of year, incorporating these simple practices can get you through the task quicker and easier. You may even make your accountant smile.

By Kyle Flowers, director of marketing, eFax


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