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3 Tech Solutions for Tax Season Woes

December 30 2011

I have a heavy feeling deep down inside. It’s too late to be the effects of holiday gluttony, so how do I account for this painful knot in my stomach? Oh wait – I understand now – it’s time to start thinking about tax season! If the thought of preparing your taxes fills you with dread (like me), you may want to consider some tech tools that just might make it a little less painful.

1) Easy Mile Log
Like many real estate professionals, I am an independent contractor. This means that, if I don’t want to take a major hit at tax time, I have to track every work-related penny I spend so that I can write it off as a deduction. A big factor there is mileage! I keep a little notebook in the center console of my car for tracking my mileage to-and-from the office, but I’m terrible about remembering to write in it. So I’m very intrigued by a new product called Easy Mile Log.

In fact, I was hoping that this handy dandy little GPS unit would end up in my Christmas stocking. I was disappointed when it didn’t. Looks like it’s going to have to be my present to myself in the new year.

So, what am I going on about? What is Easy Mile Log? I talked to David Winiarczyk, President of Easy Mile Log, to get the skinny. “Everybody knows they’re supposed to keep a mileage log, but nobody does it,” says David. “Easy Mile Log makes it easy to do what you’re supposed to do. “

The Easy Mile Log GPS unit plugs into the cigarette lighter in your car. When you begin your trip, simply press a button to tell the unit whether your activity is for personal or professional reasons. The GPS unit will track the mileage, date/time, route, and even automatically tracks the addresses you visit. When you plug the unit’s USB interface into your computer, you will get a full report of your activity. This nifty report can be printed and sent to your accountant. The data is saved on the unit, backs up on your computer, and can even be exported to Excel, just in case you’re audited.

Pretty cool, right? If you want one of these affordably-priced gadgets (they run less than $150 as of the date this article is published), you can visit www.EasyMileLog.com.

2) Accounting Tools
You’re all probably familiar with Quickbooks and other accounting software for small businesses. However, there are some other options for accounting tools. For example, Kashoo is one example of a product that has been created with real estate professionals in mind.

We talked to Jim Secord, Kashoo CEO, to see if he had any advice for real estate agents looking to minimize tax season blues. Here’s what Jim had to say:

  • “Move out of the shoebox (the preferred record-keeping method of most real estate agents) and use a cloud-based small business record keeping application like Kashoo.com. Your records are always backed-up, secure, and you have access to them from any computer or Smartphone.”
  • “File your receipts by vendor name, it makes them easier to find in the event you need them."
  • “Reconcile your bank and credit cards on a monthly basis (it's easier to remember what happened last month than last year).”
  • “All invoices/receipts/documents for the year should be kept together (don't mix different years together).”
  • “Have a good accountant that takes care of your business and personal taxes so they can do comprehensive tax planning.”
  • “It’s always a good idea to notate either property or client name on receipts in case of tax audit from IRS.”
  • “Get familiar with which expenses are eligible as deductions and which aren’t. For instance, dry cleaning is not an eligible expense. Sports and entertainment tickets are 50% eligible (even if the tickets are for clients and you did not personally attend).”
  • “Stay on top of your expenses by using your Smartphone to capture receipts on-the-go. The IRS accepts scanned receipts as documentation for expenses. Using Kashoo's new application for iPhone and Blackberry you can use the phone’s camera to take a picture of a receipt along with recording it in your accounting software.”

Our product directory contains a good list of accounting tools aimed specifically at the real estate industry. Check it out to see what’s available to you.

3) Tech Tools as Deductions
As a side note, if you’re looking for some extra deductions this year, you may want to consider buying a few tech tools for your home office. Here are a few ideas that could be particularly helpful for real estate professionals:

  • An iPad or other tablet
  • Digital camera
  • Software or apps

Victor Lund, RE Technology CEO recommends, “You may want to contact some of your website or virtual tour vendors. They will typically offer a 10% cash discount when people pay for the year in advance. If you get it into this tax year, you may have a double benefit of the discount, plus the reduction in taxable income from the business expense.”

I should note that I’m not a financial wizard – in fact, anything related to math or numbers has always been a challenge (I’m a writer, after all)! So I recommend that you meet with a CPA to discuss your deductions before making any purchase.