Going Paperless at Tax Time

'100% Paperless' Now a Reality for Michael Callahan And Associates

Michael Callahan and Associates' accounting practice is "100% paperless. "All of our data is 100% cloud-based, meaning you can have access to your accounting information wherever you are,” Michael says. But paperless doesn’t mean “faceless.”

From the first client meeting to discussions of complex issues, associate Joel Smith relies on RingCentral for online, face-to-face meetings that can be recorded for tracking purposes. Each new client receives a shared dashboard for use in compiling digital documents. For Joel, who has lost documents to both fire and flood, “the cloud” is now an indispensable part of tax management and planning. Here are some other tools and tips to help you "go paperless":

Your phone is your wallet: Use apps like QuickBooks Online (QBO) Receipt Capture for taking pictures of receipts and even calculating and posting expense reports. Ithelps you send invoices and pay contractors and can even calculate your mileage anytime your phone is in your car, allowing you to label trips as business or personal. (The IRS has requested documentation of odometer readings, but if your phone can time-stamp photos, a snapshot of the actual odometer or an oil change receipt should suffice.) Deluxe eChecks helps make and track online business purchases.  And, all of your banking and credit card service providers should have an app, often one that logs spending categories to simplify accounting..

IRS E-Filing is now standard: Virtually the ONLY paper filings the IRS still requires are any amended returns and 990-T forms for non-profits, required for detailing any income received apart from their primary purpose. If “hard” copies are required, a fax often suffices, so all you need is the ability to download and save documents to a computer and an e-Fax number.

Paper is not secure unless stored in a fireproof lockbox, “and then don’t count on it,” Joel says, “whereas everything online can be secured forever.” It can even be a liability for your accountant to have to store hard copies of filings, so, “we’d rather the clients be in charge of their documents.” Joel says. Besides, there are the obvious environmental benefits. “We’re not killing trees or throwing stuff in a landfill. Even if you’re shredding it, it’s waste somewhere.”

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