Practically Paperless with Evernote: Tackling Taxes
If there’s one process that drives a ton of paper, it’s taxes. Taxes are often a beast to tackle because we’re gathering up documents that have accumulated over an entire year from dozens of sources. From receipts to tax forms, you know that if you don’t retain them, you’re losing out on deductions, or even worse, won’t be able to prove your purchases in the case of an audit. If you don’t have a receipt, you lose the deduction.
The stakes to wrangle all the paper for taxes are high.
A receipt here, a refund or reassessment there — before you know it, you have piles of paper of various sizes accumulating throughout your home — your office, on the kitchen counter, in your wallet, photos on your phone, email — it’s a mess!
Paper fades, takes up space, and is easy to lose.
Good luck finding the exact receipt you need when your accountant asks you how much you spent on office supplies last year.
It’s not that you're an untidy person. Even if you’ve tucked receipts into a bulging envelope that lives in your kitchen junk drawer, the envelope bothers you. But, you don't fix it. How good would it feel to have that stack disappear?
Now, I’m not going to try to convince you to go completely paperless. I love and use paper when the time is right, but taxes for me are paper-free. I’m also a big fan of starting small and building momentum. And this especially applies when it comes to going paperless with your taxes.
Taxes are an excellent Evernote workflow to tackle first when going practically paperless.
We’re starting with taxes because we all have to pay them, receipts generate a lot of paper, and Evernote is a perfect tool to store them in because of their solid data policy — you can export all your data anytime.
How would it feel to know that you can find any receipt from anywhere? Even if you need a receipt from five years ago while you’re sipping a double espresso in Paris and only have your mobile device with you. The comfort of logging into Evernote and seeing a tidy list of business receipts, grouped by tax year, clearly labeled and identifiable — that feeling is priceless.
This isn’t a fantasy; this is my reality. And the reassurance it brings me is a milestone in my business — alleviating the stress and concern of an audit.
I mean, I can only imagine the look on an auditor’s face if they saw my organization in Evernote with every receipt for the past five years. This idea, of course, can stay in the realm of fiction.
Here’s how to start going practically paperless with your taxes:
I use Evernote to store and categorize receipts for taxes. As a self-employed business owner, managing my finances is crucial. Here are 12 reasons I chose Evernote to manage this part of my business.
Note: This structure is best suited for those whose tax season aligns to a calendar year (you’ll need to adjust it if otherwise), and for tracking one business entity in addition to your personal tax receipts. Also, rules and recommendations may vary by country.
Step 1: Get your receipts organized in Evernote.
I suggest the following two notebooks for most people:
<year> Receipts: Personal
<year> Receipts: Business
The naming conventions are purposefully ordered to organize the notebooks in a certain way. Learn more about naming conventions inside this blog post: Gaming the Naming: The ABCs of Organizing Your Evernote Notebooks.
Use the notebooks as a bucket to segregate personal vs. business receipts.
When you digitize a receipt, you’ll then file it in the corresponding notebook. When the year changes, you’ll create two more notebooks with the current year.
Step 2: Scan your receipts and tax forms.
If you’re starting your practically paperless journey mid-year, you may want to go back and scan the papers you’ll need for your current tax year. I recommend a two-pronged approach: Start scanning everything new that comes in from today forward, and also set aside small amounts of time each week to tackle past papers.
By investing 30 minutes a few times a week to scan and organize your documents, you’ll make a dent in those paper piles and be practically paperless in no time. And have some fun with it! Put on your favorite Netflix show or crank some music to get it done.
Scanning options:
If you decide to invest in a desktop scanner, I use the Fujitsu ix1600 Scanner. You can also find a Fujitsu ScanSnap that suits your budget or check out a popular competitor to the iX1600 – the Raven Scanner.
With the Evernote app on your smartphone, scan the paper and save it to Evernote. I use Scannable, but feel free to use Evernote’s built-in document camera.
Expert tip: Scanning on the go, like when you’re traveling, is a great way to save time and ensure you’ll keep track of everything. Read about how to Go Practically Paperless On Your Next Trip With Evernote.
Step 3: When the new year arrives, create two new notebooks for That year.
And start filing the receipts you collect throughout the year there.
Step 4: Pick – and stick – to a naming convention for your notes.
I suggest: "mm/dd/yy <vendor>”
Breaking the receipts up between personal and business notebooks, and combining this categorization with the practice of assigning a naming convention to each note has proven to be enough organization for me.
With only a few exceptions, I can always find what I’m looking for based on this organization. For the rare exceptions, I add additional keywords to the body of the note above the receipt as needed.
Step 5: (Optional) Tag the note to represent categories.
You can tag the note within the business receipts notebook, but it's a lot of extra effort. I suggest reflecting on if it is really necessary before committing to this.
Step 6: rely on the power of search.
At your fingertips (even from your phone) you can effortlessly find everything you need to file your taxes easily. Remember – if Evernote indexes it (meaning, you’ve saved it to Evernote), you can search for (and find it). And, Evernote indexes everything.
And an optional (but totally powerful) Step 7: Start Now.
Start now. Seriously. When you procrastinate just one more day, that turns into weeks, and before you know it, another tax year has slipped by, and you're looking at your mess of receipts, wishing you had started earlier.
Inside The Academy, we’re getting ready to start The Practically Paperless Challenge where I’ll hold your hand through the details of digitizing and organizing all that paper. And, I’ll be specifically helping members set up and master their paperless taxes workflow.
Taxes are just one of the practically paperless workflows you’ll get access to as part of the challenge.
If you want more guidance and lessons on your practically paperless journey, from scanning receipts on your next weekend trip to managing all the papers in your home, there’s a workflow training for this – plus so much more – inside The Academy. Join and start going paper-free today.
