The What and Why:
“In this world nothing can be said to be certain, except death and taxes,” wrote Benjamin Franklin in 1789. It is now 226 years later and for most of us, our tax records, data and narratives have gone digital. We are in a paperless world. And perhaps even our bodies will be recycled; see Jae Lee’s mushroom burial suit (A TED talk).
It’s that time of year when those of us in the USA populate our excel spreadsheets, drop totals into online tax softwares and await refunds. This is our annual financial accountability to our country.
If you are looking for those on again, off again Federal, State and local environmental tax incentives and rebates for solar, wind, clean cars, geothermal, bio-mass, discretionary environmental grants for clean tech, clean energy, consult your CPA, or DIY it by starting with IRS Form 5695 and its instructions.
As a former CPA in my twenties I was a tax, trust and estate consultant. I’ve seen all kinds of strange records, especially when a person passes unexpectedly. Part of this career is to help clients prepare. Technology has made that much easier for us; although not perfect, most voice recognition and scanning software has saved us time, energy, file cabinets and warehouses full of paper. Forests in particular.
I have to confess, it was far more interesting to meet client’s in person and sort through boxes of ledgers, receipts, inventories, coins, stamps, rare books, etc. than just digitally receiving their data and e-filing as it is today.
The heavy lifting has moved from physical to digital; our data is in the clouds. As a “Fledgling Digital Nomad” (see my blog on this) I have a MacBook Pro, an iphone6+, and 10 Seagate portable drives (6 of those store old tax records, 30 years of artwork digitized, photos/videos/16mm movies from 1959 to now). My work and personal history basically is now data stored on 10 devices 3x4x.5 inches that fit in my bank’s safe deposit box or a small purse. Normally, that takes up 5 storage rooms 10 x 10, or a basement or attic.
I know, because I have been digitizing it all for 6 months in preparation for moving into the Silver Bullet Tiny House with my remaining 400 possessions of dishes, clothing, some preserved food and a few books. (Downsizing in a sustainably responsible way from a 3 bedroom house w/rental unit including my commercial art studio took five years, 3 moves, and whole lot of patience!)
Going digital and getting your data in the cloud can be scary. Keep your intellectual property separately and other precious private documents (wills, proxies, photos, etc.) on a portable drive, make a copy for your safe deposit box; you never know who may copy, grab or delete parts of the “cloud”. Keep precious photos in a movie format for your smartphone, computer or projected viewing.
Gleefully be free of boxes of records, photo albums and paper; saving forests and reducing your GHG emissions. The rest can be on the cloud, (which costs fewer GHG emissions) shared between all your portable devices saving you time, energy and contributing to you making smarter choices for a sustainable lifestyle.
This week, your challenge is to reduce your energy output by doing your taxes online AND reducing any remaining paper records by scanning your documents year round: go digital, if you haven’t already. This could be your annual opportunity to examine what ways your financial accountability can become more sustainable.
And after you are finished completing your taxes, reward yourself and head over to Amherst, MA. to the Sustainable Living Festival, April 25 (Saturday 10-4PM). Come and meet us. Win some free sustainable products. As an author of the soon to be released Living the Sustainable Tiny Life, a reclamation artist and sustainability consultant, I will be talking about the sustainable Silver Bullet Tiny House.
Then shred them for your renewable energy source, a wood stove, fire pit or fireplace. (Make sure you separate toxic printing materials first, before shredding.)
The scanned documents will always be available on your smartphone during the year for your reference. Then at tax time get them archived and off your phone by transferring them to the cloud or your portable drive.
2. Use more powerful portable scanners for larger scanning projects. These cost a bit ($350-$500), but they are worth it when scanning reams of old documents. If you have over 100 reams and many photographs, films and video, you may want to hire a digitizing service provider to archive them (Be careful – cost varies with type of original documents $.60-$7. a page!)
3. Going digital with all your monthly bills is a no-brainer, if you are not doing it already! Many banks offer auto payments and can generate checks to others with a click on your device.
4. Make use of the following Federal, State and Local Business and Individual Deductions (check your state for customized incentives, these tax laws are complex, consult a professional CPA if necessary):
- Federal incentives (New Energy Efficient Home Credit (IRC Section 45L), Energy Efficient Commercial Buildings Deduction (IRC Section 179D, Residential Energy Credit Form 5695 , Plug-In Electric Vehicle Credit (IRC 30 and IRC 30D), Federal Brownfields Tax Deduction
- Gifts in Cash or Kind to Non-profit organizations, places of worship, foundations, land trusts and charitable institutions.
- Retro-fitting, building, renewable energy and appliance incentives, deductions and credits
- Statutory Incentives (investment credits, jobs/ employment credits, R&D credits, and energy credits)
- Negotiated Incentives (training grants, sales/use tax incentives, property tax abatements, utility rate reductions, Tax increment financing (TIFs))
The Deep Dive:
The Top 7 Income tax software’s compared here.
Energy Star’s 2015 Environmental Tax Credit Advice