Learn which receipts you should hold onto and why.
Receipts tell the story of your business expenses. Many are essential for filing your taxes. Some are less important and you can eventually discard them. Here's our general advice on keeping receipts.
Do I need to keep my receipts?
Yes. You should hold onto receipts, other than the exceptions listed in the "What receipts do I not need" section.
Receipts are proof of your business expenses. They're a lifesaver in the rare chance you're audited or asked to show documentation. Receipts, along with bills and canceled checks, tell your business history.
How do I keep track of receipts in QuickBooks?
In QuickBooks, you can attach digital copies of receipts to transactions. This lets you keep everything in one place, add notes, and retrieve receipts quickly. QuickBooks Self-Employed also makes smart suggestions for categorizing your expenses for your Schedule C.
- Attach receipts to transactions in QuickBooks Online
- Capture, attach, and create transactions from receipts in QuickBooks Self-Employed
What should be on my receipt?
Most receipts already have the info you need. For business expenses, the IRS wants to see:
- The amount
- The place the transaction took place
- The transaction date
- The “character” (category) of the transaction
Should I keep physical or digital copies?
You can keep either. Do what works best for you. If space is an issue, tax experts say digital receipts are acceptable forms of documentation.
The IRS has minimum requirements for digital receipts. They should be:
- Stored in a secure place that's easy for you to access
- Captured in their original form
- Reproducible for the IRS whenever necessary
Do I need receipts for expenses I plan to claim as deductions?
Yes. Keep thorough records of any expenses you plan to claim as business deductions.
If you're audited, the IRS will take an especially close look at your business deductions. Take extra care with cash expenses. Paper receipts may be your only proof.
What receipts do I not need?
The IRS lists situations when you don't need a receipt. Check the link for full details. In general, there are exceptions for travel, gifts, entertainment, and car expenses:
- You don't need receipts for business expenses that are less $75. For example, you don't need a receipt for a $25 box of donuts you give as a gift to your accountant. Lodging is the exception. You need to document all lodging expenses you claim as travel expenses, regardless of the amount.
- You don't need receipts for transportation expenses when a receipt isn't readily available. Bridge or road tolls are two examples.
- You have a per diem allowance from your employer that includes meals or lodging. (If you're self-employed, you can use federal per diem standards in lieu of an employer.