This is NOT a post about a quirky design scheme whereby I laser focus on reducing our expenses by framing them and mounting them on the wall. Instead, it’s one small move that changed Mr PoP’s perspective on receipts for the better.
You See, Mr PoP Hates Dead Trees
If Mr PoP had his way, International Paper Company would be out of business. I don’t know if I’ve ever known someone who has truly embraced the digital world the way Mr PoP does. This man HATES paper. When the original Kindle came out (and was still ridiculously expensive), he bought one and henceforth refers to print books as “dead tree editions”. He prefers vCards to business cards, and if you ever remind him of an obligation or ask him to do something his immediate response is “Can you send me an email with that?” Followed sometimes by, “Don’t forget to attach an outlook invite.”
And receipts? What need does he have for receipts when all of our purchases are made on rewards credit cards where the transaction is immediately tracked via mint, and any returns are super easy since they can always be looked up by our cards even when we don’t have receipts.
For our normal everyday life, this is okay. Some might criticize, but we don’t keep receipts for every little purchase in life. I usually double check a receipt for errors as I’m leaving the store, but then have no qualms about disposing of it. After all, I’ve run the numbers many times (and our tax man has even double checked them!) and we’re so far from being able to itemize deductions on our taxes that it’s not worth the hassle of keeping receipts.
EXCEPT For Our Rental Expenses
Unlike normal itemized deductions, expenses for our rental duplex are fully deductible (against the rental income) above and beyond the standard IRS deduction. But (in case of audit), we need to have receipts to back them up and I’m the bookkeeper in the family. (There are a few caveats to the deductibility, but in general this is true for all expenses associated with repairs, maintenance, and advertising. Capital expenditures like a new AC unit need to be depreciated over time, but those big bills usually come directly to me so I don’t need to chase Mr PoP for them anyhow.)
So for the past almost 3 years, every time there’s been a rental expense that Mr PoP generates (and to be honest since he’s the one that does MOST of the repair work at the duplex, he’s the one buying MOST of the supplies for said work), it started a process that usually goes something like this:
- Mr PoP mentions repair needed at duplex
- I say, “Okay, just SAVE THE RECEIPT!”
- Mr PoP rolls his eyes and then completes repair at duplex
- I pester him for weeks about location of receipt and most of the time (but not all the time) it is recovered from the recesses of the center console in his car.
Once I even went looking for a receipt in his center console and – I’m not kidding! – was bit by a spider. We needed a better system and more buy in.
So a couple of weekends ago, when Mr PoP was mentioning something that needed to be fixed for our most recent batch of renters, I gave my typical, “Please, for the love of all that is holy! Save your receipts!” plea. And Mr PoP did his typical eye roll in response.
But then a minute later this happened:
Mrs PoP: “How about if every time you see a receipt for something at the duplex, you think of it as a voucher for 25% of what you just spent? Redeemable at tax time, but ONLY if we have the receipt.”
Mr PoP: “Why didn’t you tell that to me three years ago?”
Mrs PoP: “I didn’t know I had to!”
See, since our marginal tax bracket is 25% (though we’re getting close to 28%!), that means for every dollar of deduction we take against our rental income we avoid paying $0.25 in taxes on our rental income. Hence the 25% voucher.
Now Mr PoP is totally on board with keeping duplex receipts and even decided he wants an official “receipt container” that he’ll keep in his car. He’s pretty sure if that exists he’ll be able to keep the receipt as long as it takes him to get from the store to his car to put the receipt in its special location. Then we can empty it out and I can organize them once every few months.
Only time will tell how well this system will work, but reframing receipts in Mr PoP’s head as vouchers for cold, hard cash has definitely affected his buy-in when it comes to keeping track of them and saving them for tax time. And I can’t see that as anything but a good thing, especially if it reduces future eye rolling. =)
How do you view receipts? Has there been anything you’ve mentally reframed lately to help keep you on track?