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No. of Recommendations: 4
We are finally going to be able to itemize this year after many years of not being able to, thanks to a new mortgage. I went through the pain-staking task of adding up the sales tax on EVERY FREAKIN' PURCHASE we made this year. The grand total? Almost $4000 in sales taxes. Uncle Sammy would spot us less than half of that. I'm glad I went through the exercise. This year, it was worth it, but it took me many, many hours to add all those darn receipts up. I'll do it again next year, but will likely not have as many big ticket items (thanks to the new home)...so, it will be an interesting exercise next year to see if it is still worth it.

:-)
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No. of Recommendations: 4
This year, it was worth it, but it took me many, many hours to add all those darn receipts up. I'll do it again next year, but will likely not have as many big ticket items (thanks to the new home)...so, it will be an interesting exercise next year to see if it is still worth it.


If you use personal finance software, you might want to split transactions, and list sales tax as a separate line. For instance, rather than put down $1065 as "new stove", you'd put down $1000 for new stove and $65 for sales tax. Then at the end of the year you can just run a report to show what you paid. Seems like a lot of work, but then, so is keeping receipts and adding them all up at then end of the year.
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This year, it was worth it, but it took me many, many hours to add all those darn receipts up. I'll do it again next year, but will likely not have as many big ticket items (thanks to the new home)...so, it will be an interesting exercise next year to see if it is still worth it.


If you use personal finance software, you might want to split transactions, and list sales tax as a separate line. For instance, rather than put down $1065 as "new stove", you'd put down $1000 for new stove and $65 for sales tax. Then at the end of the year you can just run a report to show what you paid. Seems like a lot of work, but then, so is keeping receipts and adding them all up at then end of the year.


Another option is to scan all of your receipts using a program like NeatReceipts. It will OCR your receipts and categorize the items for you. Spoiler: the NeatReceipts software/hardware bundle is not cheap (but it is deductible <g>).

Ira
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In addition to the mortgage interest, you may have property tax to pay. That is deductable too (at least if you live in the house; I no longer remember the details because my mortgage has been paid of for a while now).

Since my mortgage is paid off, I no longer have that deduction, but my property tax has been increased so much that it is a bigger deduction now than the interest was then.
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Another option is to scan all of your receipts using a program like NeatReceipts. It will OCR your receipts and categorize the items for you. Spoiler: the NeatReceipts software/hardware bundle is not cheap (but it is deductible <g>).

Will NeatReceipts distinguish the tax from the main purchase?

Bob
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Hey Bob,

Will NeatReceipts distinguish the tax from the main purchase?

It looks like it does based on info on Amazon. I looked at the portable scanner for ~$175 rather than the larger desktop model for ~$400. However, I saw one user review who said capturing the discrete data from a receipt depends on the quality of printing on the receipt. He stated it was 50/50 ? (shrugs)

<snip>

NeatReceipts Mobile Scanner and Digital Filing System

Automatically extracts key information from scanned receipts; can export to Excel, Quickbooks, TaxCut, and more
Scans are IRS-accepted digital copies, making tax preparation a snap.


http://www.amazon.com/NeatReceipts-Mobile-Scanner-Digital-Fi...

HAPPY NEW YEAR !!!

Rich
Arizona
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Will NeatReceipts distinguish the tax from the main purchase?

It looks like it does based on info on Amazon. I looked at the portable scanner for ~$175 rather than the larger desktop model for ~$400. However, I saw one user review who said capturing the discrete data from a receipt depends on the quality of printing on the receipt. He stated it was 50/50 ? (shrugs)


Yes, it does. I have both the portable (the earliest model) and desktop (about three years old) scanners. I purchased them for purposes unrelated to digitizing receipts. The desktop unit is faster, does both sides at once, and can handle multiple documents at once. The portable unit is wonderful when I'm on the road and want to get a document into my computer.

Any OCR software is sensitive to the quality of the original, but I have found that these scanners are very accurate when calibrated and used with reasonable quality documents. They're not too happy with receipts that have been carried around crumpled in one's pockets for weeks before scanning.

Ira
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I keep most of our receipts not for tax purposes but to track expenses. Any grocery receipt with items other than groceries (booze, dog items, household goods, personal items) goes in an envelope. Before it goes in the envelope, I circle the non-grocery items. Same with receipts from any stores that sell stuff that falls into more than one of the categories that I track.

At the end of each month I check the receipts against the credit card and bank statements and do a monthly expense report. All in Excel. It doesn't take very long. If the only thing I wanted to track was sales tax, it would be even easier. Circle the sales tax on every receipt and stick it in an envelope. Circle the date, too, if you want to match it up against your credit card purchases.

Fortunately, sales tax is one thing I don't have to keep track of in Oregon.

--fleg
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In addition to the mortgage interest, you may have property tax to pay. That is deductable too (at least if you live in the house; I no longer remember the details because my mortgage has been paid of for a while now).

I also, unfortunately have PMI, which I've heard is deductible but have not verified yet.

To everyone else, I did think about splitting the tax out for each receipt in MoneyDance. I'll try it, but it requires me to be very proactive. :-)
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