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June 14, 2014 6:25 PM

I'm having trouble keeping my finances organized for tax purposes. Special considerations: renting out a property, medical expenses.

My situation is pretty simple. I rent out one residential property, a house, and as far as my medical expenses go most of them are covered by insurance. So I didn't think this would be complicated, but it is. In both cases, I have many small expenses that add up to a not insignificant amount. The information is currently spread everywhere because I use so many methods of payment. I use several credit cards, a debit card, direct deposit/deduction, checks, and cash. As far as the property expenses go, some of this can't be avoided. My handyman isn't going to start taking credit cards. I can't pay the hardware store the two bucks for a key duplication in anything but cash. The water company doesn't do online bill pay. My credit cards gives reward points, so I want to use them for most house-related purchases, but then Costco will only take a debit card. Etc.

My receipts are spread everywhere too. Some are in my wallet, some I stuck in a file folder, sometimes I bought personal stuff at the same time and left them in the bag because I thought I might return that shirt. Some I never got because there weren't any or I didn't realize they were important. Some I can't find now. Etc.

This is all true for the medical expenses as well: Sometimes I'm paying co-pays at the point of service with a card, other times I'm getting bills later in the mail that I pay with a check because setting up online bill payment for the lab fee turned out to be really arduous and I only get labs once a year anyway or the doctor's office charges a fee if I want to pay on the phone with a card. Etc.

Another part of the problem is that I didn't always realize something was important for tax purposes until later. Oh, those trips count as a business expense? Well, let me see if I can remember what method of transport I used and how I paid for it and how much would the tolls have been? Etc.

So, help. How do I track this stuff so come tax time I can pull out the numbers my accountant needs quickly and easily as well as get all the deductions I should? I had to file an extension for last year's taxes, so I'm still working on gathering everything together from last year and want to do better for next year. I'm feeling overwhelmed by this, and more importantly, I know I'm losing money I can't afford to lose by not being on top of it.

Thanks.

posted by unannihilated to Work & Money (5 answers total)

An aggregation utility like Mint or Yodlee can aggregate all your expenses into a single UI that will then let you tag expenses with notes like "tax deductible - business expense" or "medical expense" and generate a report at the end of the year with a sum total of deductible expenses. (BTW, medical expenses are only deductible on your federal income tax if they are more than 10% of your AGI, so unless you have unusually high medical expenses you probably don't need to track them, unless it's to get reimbursed from an HSA or something.)

If you think you might need a receipt for a deduction (and honestly there's like a 99% chance you don't need the actual receipt as long as you know how much money you spent...nobody's going to ask to see the receipts unless you get audited) just take a photo of it on your phone as soon as you get it. I'm sure someone will chime in with utilities that easily allow you to manage receipt photos.
posted by phoenixy at 7:10 PM on June 14, 2014

Excel.

iBank.

Quicken.

MS Money.

There are tons of applications that will let you track expenses. Most of them will download transactions from your financial institution, all you need to do is tidy up the data (if you're a perfectionist) and categorize the transaction. Do that once a week and manually enter your handful of cash expenses and you're all set.
posted by Brian Puccio at 8:11 PM on June 14, 2014

Response by poster: Just wanted to jump in and mention that I'm already familiar with Excel, and I've heard of programs like Mint and Quicken though I've never used them. I'm looking for some more specific recommendations on programs or strategies based on the nature of what I'm tracking (many small expenses paid for via several different methods, property rental/medical expenses). Thanks.
posted by unannihilated at 8:29 PM on June 14, 2014

One thing that might help, would be to get a separate checking account for the rental property and possibly even a second credit card. This won't help the receipt issue, but at least it would help to put those expense in there own buckets.

One thing I have found for trips is to create a folder for each trip and put all receipts there and then hold on to them for a the next year. If I don't need them for the taxes the next year they get shredded.
posted by benk at 11:04 PM on June 14, 2014

I use Quicken to record EVERY purchase. Tax-related categories are checked, and at tax time my printout for the year is complete. My tax person has grudgingly accepted my printout as valid, but asked me to reorganize it into a few larger categories. No problem. I also keep a file of all tax -related receipts, and take it with me to the appointment, but have never had to go through"all that" for the tax man.
Bonus: I can check to see where my money went - all clothing or grocery or whatever purchases.
Simple input = very useful output.
posted by Cranberry at 11:18 PM on June 14, 2014