Expensify vs Shoeboxed: Which One Is for You?

Whether you’re self-employed or a business owner, choosing the perfect accounting software for your business is very important. There are countless software and apps on the market with various features, pricing, details, and so much more to check. We understand that not all people have time to test dozens of solutions. That’s why we came up with a complete comparison between the top choices for receipt tracking and expense management software: Expensify vs Shoeboxed

An overview: Expensify vs Shoeboxed

1. Cross-platform compatibility

Different people have different needs. Some love iOS, while others are loyal to Android. And there are Windows users, and there are people who like to access things on a browser. This situation is especially true when working as part of a team.

Both Shoeboxed and Expensify are available on Android and iOS platforms. You can also use them in any browser of your choice without any issues. This will help you keep your receipts in sync at all times.

2. Interface

Since most of us use smartphones to scan receipts, the app’s interface is an important part to consider when choosing the right accounting app. Both apps are easy to use with the basic functions displayed right on the portal. The interface is clean and intuitive with a focus on simplicity and speed.

A comparison between Expensify vs Shoeboxed’s interface

3. Main features

The basic functionality remains the same. You scan an expense receipt, and the app will extract the key data such as items, quantity, price. They will also categorize them by vendor, the total amount, date, and payment type. There are various categories to further classify your expenses like Mileage, Groceries, Entertainment, Office Supplies, etc. Then, the apps create a digitized version of the receipt synced with your cloud account. 

Both apps allow you to arrange receipts by trips, create a report, and submit it for approval. Users can also track mileage for business trips with both apps. Additionally, Expensify offers a per diem functionality where an individual is given a daily allowance, and you can use the app to keep track of it on a daily basis.

On the other hand, Shoeboxed has one feature that Expensify lacks. If you have a bunch of receipts and no time to scan them, you can mail them straight to Shoeboxed‘s processing facility for free with our postage-paid Magic Envelope™. Shoeboxed will scan the receipts, turn them into organized and actionable digital data, and upload them to your account. 

This mail-in feature that Shoeboxed offers helps you clear your desk and drawers and bring you up to speed. This unique service is extremely useful for small business owners or freelancers—those who have to handle a lot of work on their own. By doing this, you can free yourself from the paperwork and focus on improving your business’s core value. 


What’s more, Shoeboxed ensures that all your digital receipts are human-verified and audit-ready. You can rest assured that your receipts are legibly scanned, clearly categorized, and accepted by both the Internal Revenue Service and the Canada Revenue Service in the event of an audit. This is the best choice for freelancers and business owners when it comes to tax season. 

4. Third-party integration

Both Shoeboxed and Expensify integrate with various third-party apps and software such as Quickbooks, Intuit, and Xero. Expensify also connects with Microsoft, Oracle, SAP, Bill.com, Uber, and several other popular services. 

5. Pricing

Pricing is definitely an important factor to consider, especially if you’re looking for a scalable solution.

Shoeboxed offers three primary plans. The Startup plan (for individuals and freelancers) begins at $18/month, allowing you to scan and store up to 900 documents (both physical and digital) per year. If you are a professional or small business owner, go for the Professional plan. With $36 for two users, this plan offers you 3600 documents/month. If you own a business with high volume, the Business plan at $54/month with 7200 documents/month is the most suitable option.

On the other hand, Expensify takes a simpler approach limiting the number of plans available. The individual plan begins at $5/month with no limit on receipts scanning. If you’re working in a team, Expensify offers a $9/user/month plan and a corporate plan that begins at $18/user/month. They also have an enterprise solution customized based on your business’s demands. 

Comparison: Expensify vs Shoeboxed

To help you better visualize the differences between Expensify vs Shoeboxed, we’ve made this handy chart for you: 

ExpensifyShoeboxed
OverviewExpensify is an expense management system for personal and business use. Expensify helps users scan receipts, track expenses, and book travel all in one app.Shoeboxed is the painless solution for freelancers and small business owners to track and digitize their receipts, maximize tax deductions and prepare audit-ready reports.
Platforms supported– Web-based
– iOS
– Android
– Web-based
– iOS
– Android
Language supportedEnglishEnglish
Targeted customers– Freelancers
– Small businesses
– Mid-sized businesses
– Large enterprises
– Freelancers
– Small businesses
– Mid-sized businesses
Customer support– Email
– Phone
– Live support
– Video tutorials
– Phone
– Online
– Video tutorials
Features– One-click receipt scanning
– Credit card import
– Multi-level approval workflows
– Corporate card reconciliation
– Accounting, HR, and travel integrations
– Multi-level coding
– Advanced tax tracking
– Audit and compliance
– Delegated access
– PCI-compliant security
– Automatically identify currency
– Receipt scanning
– Optical Character Recognition
– Human data verification
– Scanned receipts storage
– Receipt search
– Mobile receipts tracking
– Mileage tracking
– Data digitization service
– Gmail receipts archiving
– Business cards management
– Tax filing
– Expense reports
– Multiple international currencies
IntegrationsExpensify integrates with various accounting software as well as HR, travel, and accommodation systems and applications:
– Accounting: Bill.com, FinancialForce, NetSuite, QuickBooks, Sage, Xero, Scan Snap
– Transport: Automatic, Grab, Lyft, Trainline, Uber
– Accommodation: Hotel Engine, HotelTonight, Roomex, TripActions
– Travel Bookings: Flight Sugar, Gallop, Jettly, Lola, Pana, TravelPerk
– Travel: NexTravel, TripActions, Trip Catcher
– Other Integrations: Accelo, Global VATax, PayPal, RevelPOS, Microsoft Dynamics, Financial Force, Workday, TSheets
Shoeboxed integrates with the following third-party solutions:
– QuickBooks
– Xero
– MYOB
– Dropbox
– Evernote
– GoDaddy Online Bookkeeping
– WaveAccounting
– FreshBooks
– OneSaas
– Saasu
– Salesforce
– WorkingPoint
– Bench
– ScanSnap
PricingAlong with the free version, Expensify offers two pricing plans: 
– The Collect plan at $5/user/month
– The Control plan at $18/user/month
Along with the free version, Shoeboxed offers three pricing plans: 
– The Startup plan at $18/month
– The Professional plan at $36/month
– The Business plan at $54/month

In the end, the choice is yours

By comparing the features, integrations, and pricing with your business’s needs, you’ll be able to decide which app is the best fit for your business. Don’t forget to get a free trial before subscribing to experience how the program can benefit you in practical situations.

If you’d like to see more comparisons between Shoeboxed and other accounting apps, let us know in the comments! 

Don’t forget to subscribe to the Shoeboxed blog for more engaging stories about entrepreneurship, staying organized, DIY accounting, together with Shoeboxed‘s latest product updates. 

Understanding the IRS’s Tax Underpayment Penalty and How to Avoid It

Whether you are a freelance worker or an owner who earns money from your business, if you didn’t pay the estimated tax properly, you could end up paying an Internal Revenue Service (IRS) tax underpayment penalty. 

This article covers what can trigger a penalty and what you can do to avoid penalties in the future. 

What is a tax underpayment penalty and how does it work?

Though you only file one tax return each year, federal income tax is technically a pay-as-you-go system. You’re expected to pay tax on your income as you earn it throughout the year. Ordinarily, your employer does this for you through income tax withholding. However, if you are a freelancer, you must make your own tax payments throughout the year.

A tax underpayment penalty is a fine imposed by the IRS on individual or corporate taxpayers who don’t pay enough of their estimated taxes, don’t have enough withheld from their wages, or who pay late. The purpose of this penalty is to promote on-time and accurate estimated tax payments from taxpayers. 

The IRS may charge the tax underpayment penalty if you owe more than $1,000 in tax when you file your tax return. They may also apply this penalty if the payments you made add up to less than 90% of the tax you owe. For example, suppose that you owe $10,000 worth of tax on your 2020 tax return, but you only made $8,000 in estimated tax payments. In this case, since your tax payments only amounted to 80% of the tax due, the IRS could apply a penalty. 

The tax underpayment penalty isn’t a static percentage or flat dollar amount. Suppose the taxpayer realizes that they have underpaid taxes. In that case, they must then pay the difference plus a penalty calculated based on the remaining balance owed and how long the amount has been overdue. 

The failure-to-pay penalty that applies to tax underpayments is 0.5 percent of the amount owed for each month (or another time frame) the tax is not paid. This underpayment/failure-to-pay penalty won’t exceed 25% of the unpaid amount. 

Along with a penalty, tax underpayments (as well as overpayments) generate interest. The IRS sets the interest rate every quarter for most individual taxpayers, based on the federal short-term rate plus 3%.

The interest payment rates for Q4/2021 (announced on Aug. 25, 2021) are:

  • 3% for individual underpayments
  • 5% for large corporate underpayments (exceeding $100,000)

Exceptions for underpayment penalties

There are certain exceptions when the underpayment penalty doesn’t apply, which are: 

  • A taxpayer’s total tax liability (after withholdings and credits) is less than $1,000
  • The taxpayer paid a minimum of 90% of the total tax from the current year’s return or paid 100% of their tax liability from the previous year. (*See below for a more detailed note)
  • The taxpayer missed a required payment due to an unforeseen, uncommon, or noteworthy event (such as a casualty or disaster)
  • The taxpayer retired at age 62 or older during the prior or current tax year 
  • Estimated payments were unfulfilled because the taxpayer became disabled during the tax year or the preceding tax year
  • Any other situation in which the underpayment was due to a reasonable cause, not willful neglect. 

(*Note: In this case discussed in this second point, the rule changes a bit if your annual income increases. If your adjusted gross income for the current tax year exceeds $150,000 ($75,000 if married filing separately), you must pay 110% of your previous year’s tax liability.

However, those who don’t qualify for the above exceptions may still qualify for a reduced tax underpayment penalty in certain circumstances. For instance, individuals who change their tax filing status from “single” to “married filing jointly” may be eligible for a reduced penalty because of the higher standard deduction.

What you can do if you received a tax underpayment penalty

Generally, if you fail to pay a sufficient amount of your taxes owed throughout the year, the IRS can issue a tax underpayment penalty. However, suppose you have already paid enough and still receive a tax underpayment penalty. In that case, you may request to have it waived by showing a reasonable cause or proving that you were unable to calculate your estimated income. 

In some cases, you may successfully reduce or eliminate your tax underpayment penalty if the IRS provided you with incorrect information. For example, if you called the IRS to address a question and got the wrong advice from an IRS agent, you might succeed in avoiding a tax underpayment penalty. To be eligible for this, make sure you always note down the date and time of your call to the IRS as well as the name of the person you spoke to. If you encounter an agent who is hesitant to give you a firm answer to your question, try to be patient with them. Many agents are cautious to answer anything that could be regarded as tax advice for fear of misspeaking or giving you wrong information.

How to avoid tax underpayment penalties in the future?

No one likes ending up with a tax underpayment penalty, so here are some steps you can take to avoid this penalty in the future. 

1. Be aware of when your payments are due

For starters, adequately paying quarterly taxes by the dates shown below will help save you from incurring the underpayment penalty: 

  • Apr. 15
  • Jun. 15
  • Sept. 15
  • Jan. 15 of the following year

If a due date falls on a weekend or holiday, the payment is due the next business day.

2. Annualize your income

Generally, you don’t need to wait and pay all your tax liability at the end of the year. Especially if your income is unpredictable or seasonal, you may want to annualize your income, which basically means you will pay your tax payments based on a reasonable estimate of your income during each quarterly period. 

If you own a seasonal business and most of your annual earnings come from three consecutive months, annualizing your income can help you better estimate your tax payment. Calculating your estimated payments and making quarterly estimated payments can help you avoid the tax underpayment penalty. To use this method, you need to complete Form 2210 and attach it to your return.

For example, your business makes $30,000 per year, but all of that money comes in from June through September. When determining your estimated payments, take the $30,000 you expect to make and divide it by 12 months. This way, you can spread the amount of your estimated tax payments evenly across the year and make sure you don’t break the IRS’s pay-as-you-go rule.

3. Adjust your W-4 withholding

Generally, employers must withhold taxes from employees’ paychecks based on their earnings and employees’ information on their W-4s. If your employer isn’t withholding enough tax, you can make up the difference by revising your W-4 and requesting that they withhold more.

You can use the IRS withholding calculator to estimate how much your employer should withhold from your paychecks. Then fill out a new Form W-4, indicate how much you want to be withheld, and submit it to your employer. This can reduce or even eliminate the need for making estimated payments on your own.

The bottom line

To pay the right amount of your taxes owed throughout the years, you can ask your employer to withhold more from your paycheck. Otherwise, you can calculate and make your quarterly estimated tax payments if you’re a freelancer.

Submitting tax payments on time and filing paperwork can seem daunting, but it’s all part of developing a disciplined, well-organized documentation process. The Shoeboxed app can help your business stay efficient and organized!

Shoeboxed is a painless receipt-tracking and expense-managing app that helps get you ready for tax seasons. After scanning your receipts with the Shoeboxed app, you can create clear and comprehensive expense reports that include images of your receipts. You can then export, share or print all of the information you need for easy tax preparation or reimbursement, all within a few clicks. Shoeboxed ensures that the digital versions of your receipts are legibly scanned, clearly categorized, and accepted by both the Internal Revenue Service and the Canada Revenue Service in the event of an audit. 
The Shoeboxed app is available on iOS and Android. Try Shoeboxed for free and get yourself prepared for tax seasons!

What Does IRS Stand For? Everything You Need To Know About The Internal Revenue Service.

Many Americans and foreigners working or living in the United States only engage with the IRS once a year when they file a federal income tax return and either wait for a refund or transfer money to pay taxes. However, the IRS does a lot more than just collect money and send out refunds.

So, whether you’re familiar or unfamiliar with this government agency, understanding thoroughly about the IRS will definitely help you in your future career. This article will walk you through the IRS, from its name, history, how it works, and the IRS’s importance in our lives. 

What does IRS stand for?

Most of you probably have heard about the IRS several times before, but what does IRS stand for actually? IRS stands for the Internal Revenue Service. 

Although the Internal Revenue Service didn’t get its name until the 1950s, the origins of the agency date back to the Civil War. President Abraham Lincoln created the IRS through the Revenue Act of 1862 and enacted an income tax to help pay for the Union cost of the Civil War, which lasted for ten years before being repealed. 

In 1894, the Wilson Tariff Act reestablished the income tax, but later, in 1895, the Supreme Court ruled the income tax unconstitutional. This meant no income taxes could be collected until three-quarters of the states ratified the 16th Amendment to allow Congress to enact an income tax. This created and established the legality of the first federal income tax program. The first income tax rate was 1% on income over $3,000 and 6% on income over $500,000. 

Tax rates increased to finance World War I, then decreased in the postwar years before rising again during the Great Depression and World War II. Tax withholding was instituted at this time.

The tax collection agency was reorganized in the 1950s, and the Bureau of Internal Revenue became the Internal Revenue Service. The IRS was reorganized again in 1998 to become more consumer-focused. 

What does the IRS do? 

The Internal Revenue Service’s mission, according to its website, is to help America’s taxpayers understand and meet their tax responsibilities and enforce the law with integrity and fairness, and provide top-quality services to achieve these goals. The IRS divides this mission into three distinct responsibilities: 

  • Administer tax laws:  

One of the first and foremost responsibilities of the IRS is to assess and collect taxes on behalf of the federal government. In 2020, the IRS collected nearly $3.5 trillion in taxes, accounting for income taxes, employment taxes, business income taxes, excise taxes, estate, and gift taxes.

Besides collecting taxes, the IRS is also in charge of issuing tax refunds, which an individual or business can claim if they overpay their taxes. In the fiscal year 2020, the IRS processed more than 240.2 million federal tax returns and supplemental documents. 

  • Enforce tax laws: 

An essential part of the IRS’s enforcement mission is to seek and identify those who have underpaid their taxes, whether due to a math error or criminal activity. These examinations can either take the form of correspondence or field examinations. For the 2019 fiscal year, the IRS audited 771,095 tax returns, accounting for 0.6% of individual income tax returns and 0.97% of corporate tax returns. About 73.8% of IRS audits occurred by mail, while 26.2% happened in the field. 

From 2010 to 2018, the IRS examined about 0.63% of individual tax returns and 1% of corporate tax returns for errors. While most errors are likely unintentional, the IRS completed 2,624 criminal investigations in 2020 alone.

There are various reasons that the IRS will undertake an audit, but certain factors may increase the odds of an examination. The chief among these factors is high income. The audit rate for all individual income tax returns in 2018 was 0.6%, but for those who earned more than $1 million in income, it was 3.2%

Running your own business might bring greater risks, too. Individuals who earn between $200,000 to $1 million in one tax year and file a Schedule C (the form for the self-employed) will have a 0.6% chance of being audited. And for those who do not, the chance ranges from 1.4% to 2.8%. 

Some noticeable red flags which could trigger an audit are failing to declare the correct amount of income, claiming a larger number of deductions than usual (especially business-related ones), making abnormally large charitable donations compared to income, and claiming rental real estate losses. No single element determines whether or not you will face an IRS audit each year.

  • Providing services to assist taxpayers:

Another important responsibility of the IRS is to provide services to taxpayers to help them understand and comply with their obligations. There are numerous reasons for an individual, business, or an exempt organization to call the IRS, but the main reason is the need for help with excise taxes, estate taxes, and gift taxes. You can find these services through the IRS website, its telephone helplines, IRS Taxpayer Assistance Centers, and volunteer tax assistance.

Why is the IRS important?

Income tax revenue, along with other tax revenue, pays for a major part of the activities of the United States Government. Taxes are used to fund Social Security, Medicare, Medicaid, national defense, aid for veterans, foreign affairs, etc. Taxes contribute to community development, pay for law enforcement, and support many government services.

The mission of the IRS is to procure these funds from taxpayers through a variety of passive and more proactive means. The IRS’s secondary purpose is to educate taxpayers on the nature of taxes and their obligations. Therefore, the importance of the IRS can’t be understated.

The bottom line

A successful business starts with great knowledge and experience. Now you know what does IRS stand for, its mission and responsibilities, and how it helps keep the government functioning. You can then prepare how to work with the IRS, from filing taxes to preparing for a business audit

Shoeboxed is a smart receipt and expense tracking app that helps businesses track and manage their business expenses. Whether you are a business owner, independent contractor, or freelancer, you can take advantage of Shoeboxed by using this app to scan your receipts, store them online, create expense reports, and get them ready in the event of an audit. 

After scanning your receipts, Shoeboxed will extract the most important data points and automatically categorize them by vendor, the total spent, date, and payment type. We ensure that the extracted data is fully searchable, editable, and human-verified. From there, you can create clear and comprehensive expense reports that include images of your receipts within just a few clicks. Then, you can export, share or print all of the information you need for easy tax preparation or reimbursement.

Shoeboxed even makes sure that the digital versions of your receipts are legibly scanned, clearly categorized, and fully accepted by both the Internal Revenue Service and the Canada Revenue Service in the event of an audit. 

Try Shoeboxed now to get yourself well prepared for the IRS! 

Download our app on iOS or Android