Tax season can be a daunting time for many small businesses, as the complex process of navigating deductions and tax write-offs can feel like an overwhelming task. However, there are ways to ease the burden and streamline this process. One effective approach is to utilize technology like Scanner Pro to track all expenses and create detailed and accurate expense reports. This will help you to maximize tax write-offs while maintaining compliance.
What is a tax write-off?
First things first, let’s briefly cover the basics. Tax write-offs, also referred to as tax deductions, are expenses that can be subtracted from your total taxable income. By reducing your taxable income, you can lower your overall tax liability, potentially leading to substantial savings. To take advantage of these deductions, it's crucial to keep detailed records of all eligible expenses.
It is also important to get familiar with what type of expenses are subject to and can qualify as a tax write-off. Check out the tax deduction policies in your country and consult with your accountant to understand tax write-offs and how keeping a record of expenses can benefit your small business.
How do tax write-offs work?
When you calculate a tax return for the year, you need to include all business expenses in the calculations. These expenses should be directly related to conducting your business and might include:
- Office rent/mortgage
- Education or Training
- Travel Hotels/Tickets/Restaurant expenses (for example, from a business trip)
If you keep track of all these expenses, including paper for digital recipes and invoices, you can later list them all for a tax deduction and reduce the size of taxable income. Which in the end means that you will lower the taxes you need to pay.
How to prepare an expense report for tax write-offs in Scanner Pro?
With technology like Scanner Pro and your iPhone or iPad, you can easily scan your receipts the moment you make an expense, and use the Expense Reporting feature to gather all the key information from the receipts in one file. No more lost receipts and no more time wasted in Excel or Spreadsheets entering all the details manually.
Scanner Pro allows you to scan receipts one by one or scan them all at once. Once you have your receipts in the app, consider the most difficult part done. All you have to do is tap More menu in the upper right corner > select Expense Report, and choose the receipts.
Scanner Pro will do its magic and capture the key information such as Date, Vendor, Type of expense, Amount, and Tax*.
* You can edit the expense report prepared by Scanner Pro and enter the tax for each expense manually if it is not displayed.
What is also great about this feature is that expense reports can be exported in two formats: PDF and CSV.
Once you get your expense report, various options are available. You can send it by email, export it to other apps such as Google Drive, print or share it with your accountant.
Technology has transformed the way we manage and report expenses, making tax season less daunting and more manageable. Utilizing tools like Scanner Pro can significantly simplify the process of creating expense reports, ensuring that you have a comprehensive record of all eligible tax write-offs.
Get organized for tax time with Scanner Pro.