Taxpayers breathed a collective sigh of relief after the April tax deadline passed. Another year of struggling to collect receipts and calculate expenses is over.
However, tax season doesn’t have to be a mad rush to collect tax documents. Instead of waiting until next spring to get organized, start now. Mobile apps make it quick and easy to set up automated systems to capture the information you’ll need in the coming year.
Many CPAs no longer accept paper documents through the mail, says Wendy Barlin, CPA and author of “That’s Deductible: Simple Tips and Tricks for Finding More Business Tax Deductions.” “We prefer apps because they create downloadable reports,” she explains.
However, if you are going to use an app, make sure you use it consistently and fully throughout the year. “My biggest concern is that people will pay for an app and think it’s going to do all the work,” says Barlin. “An application is only as good as its user.”
If you’re ready to make next tax season the easiest, here are 10 apps that can help.
- Guardian tax.
- To spend.
Mint is best known as a budgeting app that helps people track spending and measure progress toward financial goals. But in the process of doing that, you also end up collecting necessary data for tax time, such as spending in itemized deduction categories like medical expenses and charitable gifts.
“Mint makes the most beautiful reports,” says Barlin.
Those reports can be used to prepare your own taxes or provided to a CPA or tax preparer. Since Mint can be linked to multiple financial accounts, it can be a convenient way to compile a complete picture of your annual expenses.
The basic version of Mint is available for Apple and Android devices, but Mint Premium is only offered for iOS at this time.
Cost: Free for the basic app with ads, $4.99 a month for Mint Premium with no ads.
While knowing how much you spent in various categories is helpful for completing tax forms, you’ll need more than that in the event of an audit. The IRS will want to see receipts documenting expenses, and a credit card statement doesn’t count as a receipt, says Barlin.
FileThis acts as a kind of electronic filing cabinet and can be used to store and categorize everything from bank statements to receipts and utility bills. The app uses bank-grade security and you’ll get up to three years of prior statements from linked accounts, as well as new statements as they become available. As a bonus, FileThis will create invoice reminders as due dates approach.
While FileThis offers users cloud storage, you can also send items to other accounts like Dropbox, Google Drive, or Evernote.
Cost: Free for basic account, $2 to $5 per month for upgraded accounts.
Neat is another app that can capture, upload, and categorize documentation from a variety of sources. Your OCR software can extract information from a photo of a receipt and organize it. Then, when needed, the data can be sent to other tax filing programs like QuickBooks, TurboTax, or H&R Block.
“It’s an amazing way to keep track of every document that comes into your world,” says Barlin. She recommends that people use Neat not only for receipts, but for all the paperwork that may be needed in the future.
Receipt tracking is just one aspect of Neat, which offers a robust set of tools that can be used across multiple desktop and mobile devices. These include accounting, document management and billing. Workers who only want to scan a few receipts a month can find cheaper alternatives, but for freelancers and small business owners, Neat can be a good investment.
Cost: $29 per month or $240 when billed annually.
Mileage deductions can be worth hundreds of dollars for self-employed workers and business owners, but the IRS requires taxpayers to keep records of where and when they drove. You can keep a notebook in your car to record dates and destinations, or you can use MileIQ to automate the system.
When the app detects you’re traveling in a vehicle, it wakes up from sleep mode to track the route, start and end times, and other data required by the IRS for a business mileage deduction. Users can then classify trips as personal or business trips and create reports to use at tax time.
MileIQ is available to both individuals and teams and has over 1 million active users.
Cost: Free for up to 40 units, $5.99 per month for unlimited units and IRS reporting.
FlyFin bills itself as the world’s first AI tax engine for freelancers. Designed for those who need to file a Schedule C tax form, it serves as an expense tracker and tax service.
“I used to file a (tax) extension every year because I hated gathering all my information,” says FlyFin founder and CEO Jaideep Singh. Recognizing that nearly all of the information needed to file taxes is available digitally, he set out to use his computer engineering background to create a system that would allow self-employed individuals to easily capture and categorize deductions.
Using read-only access to financial accounts, FlyFin’s AI recommends expenses as possible deductions. Users can accept or reject those suggestions using the service’s iOS app. If they are unsure if something is deductible, it can be sent to a CPA for review. “The AI does all the heavy lifting,” says Singh.
At the end of the year, freelancers can send their data to a FlyFin CPA to prepare their taxes or export information for delivery to the tax preparer of their choice.
Cost: $7 per month for a basic plan, $16 to $29 per month for plans that include tax returns.
Another option for freelancers is Keeper Tax. This app scans bank and credit card accounts to look for possible deductions, although its application is more limited than FlyFin. While it does provide a way to ask tax professionals a question, Keeper Tax does not have CPAs to complete a return for you.
“That’s more for people doing (their) own return,” says Barlin. At tax time, users can complete and file their tax returns using Keeper Tax.
While Keeper Tax offers a variety of free resources on its website, such as tax calculators and articles on tax topics, details about its iOS app’s features and pricing are scarce.
Cost: $16 per month, additional fee may be charged to export data.
As with other expense tracking apps, Expensify is geared towards self-employed or small business users. Still, it could be useful for anyone who wants to track expenses and mileage in the same place.
Personal and standalone plans are accessible for free and come with options to send and receive money, send bills and receipts to managers, and split bills with others. That’s in addition to mileage and expense tracking.
Data entered through the app can be accessed through an online Expensify account, and custom reports are available through business accounts.
Cost: Free for up to 25 SmartScans (photo of a receipt that records all the details in the app) per month, from $5 to $9 per month for business accounts with additional functionality (priced per person).
If you already use Evernote, the service’s Scannable app might be a logical choice for scanning and organizing your receipts and other documentation. Available only for Apple devices, Scannable lets you tag tax-related items to easily find them in April.
Up to 60 MB of free storage is provided to basic Evernote users. Those looking for more storage or features can upgrade to a plus or premium account for an annual fee.
Cost: Free for basic account, $7.99 to $9.99 per month for upgraded accounts.
Digits is a relatively new web program that launched in 2018, and co-founder Wayne Chang says it offers something not available anywhere else. Small business owners and sole proprietorships can integrate Digits with QuickBooks to create a “digital twin” of their physical business.
“You have the ability to see the lifeblood of your business at your fingertips,” says Chang. The company hired 3D artists to help create an easy-to-use financial tool. “It doesn’t look like a finance app,” she explains. “It looks like something out of a video game.”
Using digit lookup and digit reporting, users can quickly find expense information and collect necessary details for tax filing.
Cost: Free for Starter plans.
Having receipts is vital to completing tax forms, but the IRS will want to see more than that in case you are audited.
“If you ever get audited, one of the things they ask for is a schedule,” says Barlin.
IRS auditors can look for calendar entries to help justify expenses, particularly those related to travel. While a paper calendar will work, an electronic calendar may be easier to use and share. Calendar apps from Google, Apple, and Outlook are popular options, but any calendar that comes with a mobile device should work too.
Cost: Free if you use a device’s pre-installed calendar program.