Excite Tax's answer for Utah owners: not all. A travel or gift cost under $75 needs a log entry, not a receipt, unless it is lodging (Treasury Regulation §1.274-5(c)(2)(iii)).
Not all of them, but more than most owners hope. Excite Tax's rule of thumb is to keep the receipt for anything that is not a small travel or gift cost. Treasury Regulation §1.274-5(c)(2)(iii) waives the receipt for a trip or gift cost under $75, lodging excepted, and ordinary purchases fall under the general rule that supporting documents show the amount paid and that it was a business expense.
The $75 receipt rule is the regulation's line: a receipt is required for all lodging and for any other travel, gift or listed-property expense of $75 or more. Below that line, a written record such as a log, diary or account book carries the proof on its own. The details are below.
Yes, when the system meets Revenue Procedure 97-22: the scans must be legible and readable, indexed, and traceable to the ledger. The paper can go only after the system has been tested and procedures are in place to keep it compliant. More on receipt scanning below.
By year and by type, as IRS Publication 583 suggests, with each receipt matched to its bank or card line every month. Excite Tax's step-by-step version is below.
It proves payment, not the deduction. A card statement showing the amount charged, the payee and the transaction date can prove payment, but proof of payment by itself does not establish a deduction. Keep the invoice or receipt that shows what was bought.
Generally 3 years after the return is filed, and longer in some cases: 4 years for employment tax records and 7 years for a bad-debt or worthless-securities loss. The detail is under how long to keep them.
Rebuild the record rather than guess. When a receipt is lost for reasons beyond your control, such as fire or flood, the deduction can be proved by reconstructing the records. An estimate is not a substitute, because amounts that are approximated or estimated cannot be deducted.
The starting point is IRC §6001: anyone liable for tax must keep the records the IRS prescribes. It does not prescribe a shoebox or an app; the IRS accepts any recordkeeping system that clearly shows income and expenses. What it does prescribe is evidence. For an ordinary purchase, IRS Publication 583 says supporting documents should show the amount paid and that it was for a business expense, and it lists canceled checks, cash register tapes, account statements, card slips, invoices and petty cash slips.
Receipts are the easiest way to show the second half of that sentence, what the money was for. That is why the honest answer to the question on this page is: keep most of them, and know the one place where the law lets a log stand in for them.
(A) Except as provided in paragraph (c)(2)(iii)(B), documentary evidence, such as receipts, paid bills, or similar evidence sufficient to support an expenditure, is required for— (1) Any expenditure for lodging while traveling away from home, and (2) Any other expenditure of $75 or more except, for transportation charges, documentary evidence will not be required if not readily available.
Read the regulation closely and it says three things. Lodging always needs a receipt, whatever it costs. Any other covered expense of $75 or more needs one too. And a transportation charge, such as a cab or bus fare, needs no documentary evidence when a receipt is not readily available.
The rule covers only the expenses that IRC §274(d) singles out: travel away from home, including meals and lodging on the trip, gifts, and listed property such as a car. For those, the statute wants the amount, the time and place (or the date and description of a gift), the business purpose, and the business relationship of the person who benefited. Skipping the receipt under $75 does not skip those elements; they go in an account book, diary, log, statement of expense, trip sheets, or similar record.
A spreadsheet or phone note counts: a record prepared on a computer is an adequate record. It does not have to be written the same day either, since a log kept weekly counts as a timely kept record. Car use is the same kind of expense, and a mileage log is how it is proved.
When a receipt is required, it has to carry enough detail. The regulation treats a receipt as adequate when it shows the amount, date, place and essential character of the expense. For a meal on a trip that means the restaurant's name and location, the date and amount, the number of people served, and a note of any charge for something other than food and drink. Write who attended and why on the receipt or in the log.
A Utah owner flies out for a two-night trade show, buys dinner for a prospective client, takes a rideshare from the airport and sends a gift basket to one client afterwards. Back home, the same week, the business buys printer ink.
Which of these costs needs a receipt
| Expense | Amount | Receipt required? | Why |
|---|---|---|---|
| Hotel, two nights | $278 | Yes | Lodging needs documentary evidence at any amount |
| Airfare | $214 | Yes | Any other covered expense of $75 or more needs one |
| Dinner with a prospective client on the trip | $62 | No; log it | Under $75 and not lodging |
| Rideshare from the airport | $28 | No; log it | Under $75, and transportation is exempt when no receipt is readily available |
| Gift basket for one client | $60 | No; log it | Under $75 and not lodging |
| Printer ink, bought at home | $48 | Yes, in practice | Not a travel or gift cost, so the general supporting-document rule applies |
Receipts are required for 2 items on the trip: the $278 hotel stay, because lodging needs documentary evidence at any amount, and the $214 airfare, because it is $75 or more. The dinner, the rideshare and the gift basket need log entries instead, each with the amount, the date and place, the business purpose and the business relationship.
The receipt rule does not change how much is deductible. Only 50% of a business meal counts, so the $62 dinner gives a $31 deduction, and business gifts are capped at $25 per recipient per year, so the $60 basket gives $25. The $48 of printer ink is outside the travel-and-gift rule altogether; its receipt is what shows that the amount was for a business expense.
Supplies, software, inventory, repairs, a local client lunch: none of these sits under the travel-and-gift rule, so the small-expense exception does not reach them. The general rule applies, and it asks for documents that show the amount paid and that it was a business expense.
A statement covers half of that. An account statement can prove payment when it shows the amount, the payee and the posting or transaction date, but proof of payment by itself does not establish a deduction. The regulation makes the same point about checks: a canceled check with the payee's bill ordinarily establishes the cost, but a canceled check alone does not show a business purpose. A card line that reads only the name of a big-box store could be printer ink or groceries; the receipt says which.
Scanning paper receipts is allowed, and the paper can eventually go. Revenue Procedure 97-22 says records kept in an electronic storage system that images paper records count as records under §6001 when the system meets its requirements, and Publication 583 applies every hard-copy recordkeeping requirement to electronic storage systems too. In practice that means four things.
Two warnings about receipt apps. Handing the job to one does not hand over the duty: using a third-party service for electronic storage does not relieve the taxpayer of the responsibility. And an account you stop paying for can take the records with it, since records in a system whose hardware and software the taxpayer stops maintaining are deemed destroyed unless they stay available. Export the images to storage the business controls, at least once a year.
Receipts that arrive by email or inside an app were never paper. Records that exist only as data are covered by Revenue Procedure 98-25, which defines a machine-sensible record as data in an electronic format intended for use by a computer, and it reaches the travel-and-gift rule directly: machine-sensible records kept to meet §274(d) must meet its requirements. For most small businesses its full requirements apply only in stated cases, such as assets of $10 million or more, or information required by §6001 that exists only in electronic form. Keeping the emailed receipt, saved as a file or attached to its transaction, keeps it out of that second case.
Excite Tax's recommended setup is the smallest system that meets every rule above. It takes a few minutes a week.
The IRS's general answer is 3 years, counted from the filing of the return the receipt supports, with longer periods for some records: 4 years for employment tax records and 7 years for a bad-debt or worthless-securities loss. Scanned and electronic records follow the same clock; machine-sensible records must be kept at least until the period of limitation for assessment expires. The full retention schedule is in what records the IRS requires.
Do not fill the gap with a round number, because amounts that are approximated or estimated cannot be deducted. Where the record was lost to reasons beyond your control, such as fire, flood or other casualties, the deduction can be proved by reconstructing the records. For an ordinary lost slip, ask the vendor for a copy, pull the statement line that proves payment, and write down what was bought and why while it is still remembered. If a whole year's receipts are missing, the catch-up guide covers rebuilding the books from statements.
Hand the books over when keeping them costs more hours than the business can spare, or when they stop agreeing with the bank.
Excite Tax keeps these books; the return they feed is reviewed and signed by a licensed CPA at TBD CPA LLC.
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