Read this if: You want a more efficient and environmentally friendly method of personal finance.
Gain: Better budget skills and a smaller carbon foot print.
Cost: A bit of habit change.
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Most things in life are shifting online. Finances are no different. Today the banks are shifting toward paperless statements. Meanwhile Google Wallet changes the way some people charge and taxes can be filed in all sorts of ways, electronically speaking. Shifting toward the world of digital finance can save headaches, closet space, and even save money.
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Tip 1: Utilize data consolidation and organization. Less paper is not only good for the environment; it is also beneficial for our mental capacity. Digital organization can relieve the hassle overloaded file cabinets provoke and less clutter leads to increased productivity.
Keep the files in a secure organized folder on your computer that utilizes categories. These categories depend on your sense of organizational style, but are most often broken into: time or month of transaction, type of transaction (automotive, home, medical, etc.)
Tip 2: Make digital copies of receipts to track spending.
Paperless personal finance is hindered most by the seemingly endless receipts one can accrue. However, technology hasImage may be NSFW.
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kept up with our spending habits. Scan all copies of any receipts or documents with expenses and switch financial activity to a secure email rather than mailed documents.
Keeping a digital copy of transactions will not only free up space around the desk area, but also provides an interface for tracking spending and contributions which help outline proper budgets and makes reporting much easier come tax time. Smart phone Snap technology has produced phone apps, which use the camera to take photos of receipts and other financial documents and import them into a database for easier review and calculation.
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Tip 3: Utilize direct deposit. Although spending a large part of personal finance, income is critical. As the popularity of direct deposit payments grow, many payroll servers are providing a digital interface for payees to access pay stubs, history, and benefits.
Tip 4: File your taxes online.
Income, spending and tracking expenses are large components of personal finance. Keeping them accurate and up to date are incredibly important—especially when it comes time to report to the IRS, which provides various ways to file online and paper free.
Traditionally, it has been paper or professional—but online tax preparation software and filing integrate the two, providing more filing options than ever before. Greater options are often better, but can come with added responsibilities, so weighing the options and understanding which method is best for you can really help come tax time.
Firstly, the pros: filing online can lead to a faster refund and there are several free options available, particularly for individuals who earn less than $58,000 annually. These options are available online through various avenues, and the ability to efile 24/7 allows for night owls to file their taxes just as easily as those who rise with the morning roosters.
Accuracy is always essential. Math and human error can produce minor mistakes with major consequences. Using an electronic tax program can help solve such mistakes before they happen. Additionally, the ability to review all submissions can help the software act as an editor before you submit your finalized return to the IRS.
Credit Research: Understanding and finding credits is a major benefit of tax software. These things are much moreImage may be NSFW.
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easily found using database and tax credits or deductions are no exception.
For instance, “greening” your home can provide a substantial return from the IRS. According to a Chron.com finance writer, “a range of tax credits for energy efficiency improvements are applicable for homeowners and business owners. Homeowners may receive a tax credit of up to $1,500 for making green changes to heating and air conditioning systems and insulation, a tax credit of 30 percent of cost for adding solar energy systems and wind turbine systems, and a tax credit of up to $5,000 for adding fuel cell systems.”
For businesses this means, “Home builders may receive tax credits of up to $2,000 for each energy efficient home that is constructed. Appliance manufacturers may receive tax credits for making dishwashers and washing machines that reflect Energy Star standards. And commercial building owners and designers may receive tax credits of up to $1.80 per square foot for energy efficient changes of 50 percent or more to heating and air conditioning systems.”
Students are also eligible for relatively fruitful tax credits. The American Opportunity Credit and Tuition and Fees Deductions are two incredibly important, and often overlooked, tax items which are available to students. Restrictions do apply, but the determining factors of which can be more easily assessed using software.
Tip 5: Keep data safe and private.Image may be NSFW.
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Vigilance is the key. Setting strong passwords, using computer protection software, keeping an eye on running processes, being careful when using unprotected public networks, and downloading with care will help keep your computer running and your files safe. Don’t be afraid to embrace technology in the pursuit of using less paper. Forms can often be scanned in as .PDFs, which can be edited further in its digital version. Additionally, there are several expense-tracking programs and apps available on phones and home computers.
Remember that most activities carry inherent risks. Keep all documents together and secure. And, as with any online activity, exercise caution and be wary of scams. It’s especially important to be wary of those risks when finances become involved. However, there a variety of reputable tax preparation financial services available both on and off line. Choose wisely to choose less paper and reap the benefits of being environmentally friendly and financially solid.
About the author:Katei Cranford is a recent UNCG graduate and freelance journalist.
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