Liz Weston: Common tools can save you time, money on taxes

Receipts, like memories, tend to fade with time. That’s just one reason to digitize and track tax-related information. The right apps and habits can save space, time, money and hassle — but only if you use them.

“Apps should make things easier, not more complicated,” says Clare Levison, a certified public accountant in Blacksburg, Virginia. “The definition of a good app is what works for you, not the one that’s the trendiest.”

USE TOOLS YOU ALREADY HAVE

Apps don’t have to be elaborate. The camera on your phone, for example, can capture receipts and other documentation. Levison recommends regularly transferring those images to a designated folder in your photo app to make them easier to find later.

“You don’t want those photos mixed in with all your other selfies and whatever,” Levison says.

Similarly, you can create folders in your email account to collect tax-related documents. If you’re an active investor, for example, you can put your trade confirmations there (or set up a filter so the confirmations are routed there automatically). If you purchase supplies for your business online, a folder can collect emailed receipts.

Another commonplace tool that can be helpful, especially for anyone claiming business expenses or mileage, is a calendar app. These records can help document meetings with clients, business travel and other potentially deductible events.

“The IRS auditor always asks for a copy of my calendar,” says Leonard Wright, a San Diego CPA who’s been audited four times.

Calendar records should be kept for at least seven years, which is how long the IRS typically has to audit you. (There’s no time limit if the agency suspects tax fraud, however, so be sure your choice of electronic calendar lets you retain enough history. )

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