Taxpayers gave a collective sign of relief after the April tax deadline passed. Another year of scrambling to gather receipts and calculate expenses is over.
However, the tax season doesn’t have to be a mad dash 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 next year.
Many CPAs no longer accept paper documents through the mail, says Wendy Barlin, a CPA and author of “That’s Deductible: Simple Tips and Tricks to Find More Business Tax Deductions.” “We prefer the apps because they create downloadable reports,” she explains.
If you are going to use an app, though, be sure to use it consistently and completely throughout the year. “My biggest concern is that people pay an app and think it’s going to do all the work,” Barlin says. “An app is only as good as its user.”
If you’re ready to make next tax season the easiest one ever, here are 10 apps that can help you out.
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, it also ends up collecting data needed for tax time, such as spending on itemized deduction categories like medical expenses and charitable gifts.
“Mint makes the most beautiful reports,” Barlin says.
Those reports can then 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 yearly spending.
The basic version of Mint is available for both Apple and Android devices, but Mint Premium is only offered for iOS right now.
Cost: Free for the basic, ad-supported app, $4.99 a month for the ad-free Mint Premium.
While knowing how much you spent in various categories is helpful for filling out tax forms, you’ll need more than that in the event of an audit. The IRS will want to see receipts documenting the expenses, and a credit card statement doesn’t count as a receipt, Barlin says.
FileThis acts as something of an electronic filing cabinet and can be used to store and categorize everything from bank statements to receipts to utility bills. The app uses bank-level security and will fetch up to three years’ worth of previous statements from linked accounts as well as new statements as they become available. As an added perk, FileThis will create bill reminders as due dates draw near.
While FileThis offers users cloud storage, it can also send items to other accounts such as 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. Its OCR software can pull information off a photo of a receipt and organize it. Then, when needed, data can be sent to other tax-filing programs such as QuickBooks, TurboTax or H&R Block.
“It’s an awesome way to keep track of every single document that comes into your world,” Barlin says. She recommends people use Neat not only for receipts but for all paperwork that may be needed in the future.
Tracking receipts is only one aspect of Neat which offers a robust set of tools that can be used across various desktop and mobile devices. These include bookkeeping, documentation management and invoicing. Workers who only want to scan a few receipts a month can find cheaper alternatives, but for the self-employed and small business owners, Neat can be a good investment.
Cost: $29 per month or $240 when billed yearly.
Mileage deductions can equal hundreds of dollars for self-employed workers and business owners, but the IRS requires taxpayers to keep records of where they drove and when. You could keep a notebook in your car to record dates and destinations, or you could use MileIQ to automate the system.
When the app senses it’s traveling in a vehicle, it comes out of sleep mode to track the route, start and stop times and other data required by the IRS for a business mileage deduction. Users can then classify drives as personal or business trips and create reports to be used at tax time.
MileIQ is available for both individuals and teams and boasts more than 1 million active users.
Cost: Free for up to 40 drives, $5.99 a month for unlimited drives and IRS reporting.
FlyFin pegs 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 both an expense tracker and a tax service.
“I used to file a (tax) extension every year because I loathed pulling together all my information,” says FlyFin founder and CEO Jaideep Singh. Recognizing that almost all the information needed to file taxes is available digitally, he set about using his computer engineering background to create a system that would allow self-employed people 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 aren’t sure whether something is deductible, it can be sent to a CPA for review. “The AI does all the heavy lifting,” Singh says.
At the end of the year, freelancers can send their data to a FlyFin CPA to have their taxes prepared or export information to be given to the tax preparer of their choice.
Cost: $7 a month for a basic plan, $16 to $29 a month for plans that include tax file.
Another option for freelancers is Keeper Tax. This app scans bank and credit card accounts to look for potential deductions, although it is more limited in its application than FlyFin. While it does provide a way to ask tax pros a question, Tax Keeper doesn’t have CPAs who will complete a return for you.
“That’s more for people who do (their) own return,” Barlin says. At tax time, users can complete and file their tax returns using Tax Keeper.
While Keeper Tax offers a variety of free resources on its website, such as tax calculators and articles about tax topics, details about its iOS app functions and pricing are sparse.
Cost: $16 a month, additional fee may be charged to export data.
As with other expense-tracking apps, Expensify is geared toward self-employed or small business users. Still, it could be useful to anyone who wants to easily track expenses and mileage in the same place.
Personal and self-employed plans can be accessed for free and come with options to send and receive money, submit invoices and receipts to managers and split bills with others. That’s in addition to mileage and expense tracking.
Data entered through the app may be accessed through an online Expensify account, and custom reporting is available through business accounts.
Cost: Free for up to 25 SmartScans (photo of a receipt that records all details in the app) per month, $5 to $9 per month for business accounts with additional functionality (price per person).
If you already use Evernote, the service’s Scannable app might be a logical choice for you to scan and organize your receipts as well as other documentation. Available only for Apple devices, Scannable lets you tag tax-related items to find them easily in April.
Up to 60 MB of storage is provided free 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-based program that was launched in 2018, and co-founder Wayne Chang says it offers something not available elsewhere. Small business owners and solo entrepreneurs 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,” Chang says. The company employed 3D artists to help create an easy-to-use financial tool. “It doesn’t look like a finance app,” he explains. “It looks like something out of a video game.”
Using Digits Search and Digits Reports, users can quickly find expense information and gather details needed for tax time.
Cost: Free for Starter plans.
Having receipts is vital to filling out tax forms, but the IRS will want to see more than that in the event you are audited.
“If you are ever audited, one of the things they ask for is a calendar,” Barlin says.
IRS auditors may 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. Google, Apple and Outlook calendar apps are popular choices, but any calendar that comes with a mobile device should work too.
Cost: Free if using a device’s pre-installed calendar program.