ReceiptKitWhat Receipts to Keep for Taxes When You're Self-Employed
Keep a receipt, invoice or statement for every business cost you plan to deduct, plus records of your income. Each one should show who you paid, how much, when, and why it was for the business. The IRS usually says to keep them 3 years, and longer in some cases.
- Keep proof for income and for every expense you deduct.
- Each record shows who, how much, when and why.
- Electronic copies are fine if the system is reliable.
- Most records are kept 3 years; some need longer.
What the IRS says to keep
The IRS says supporting documents back up the entries in your books and on your tax return. Sales slips, paid bills, invoices, receipts, deposit slips and canceled checks all count.
For an expense, the document should show the amount paid and that it was for a business expense. A bank or card payment alone doesn't prove you're entitled to a deduction.
- Who you paid (the store or person)
- How much you paid
- When you paid (the date)
- Why: the business purpose
- Proof of payment, like a card or bank statement
Records to keep by type
- Income: invoices, deposit records, receipt books, and any Forms 1099 you receive.
- Business expenses: receipts, invoices, account statements and credit card slips.
- Purchases for resale: receipts, invoices and proof of payment.
- Equipment and big items: when and how you bought them, the cost, and how you used them.
- Car and travel: a log of dates, places, purpose and miles, plus fuel, parking and toll receipts.
- Tax records: last year's returns and any IRS letters.
How long to keep them
The IRS general rule is 3 years from when you file the return. It's longer in some cases, so check the IRS table for yours.
| Most records (the usual case) | 3 years |
| Income you didn't report, over 25% of gross income | 6 years |
| Worthless securities or bad debt claims | 7 years |
| No return filed, or a fraudulent return | Indefinitely |
| Employment tax records | At least 4 years |
Paper or digital?
You can keep records on paper or electronically. The IRS says all the rules for paper books and records also apply to electronic ones.
The system you use has to give a complete and accurate record that the IRS can access. Don't throw away the originals until you're sure your digital copies are readable and complete.
A 10-minute weekly routine
- Scan or photograph every receipt the same week.
- Mark each one business or personal.
- Check that the store, date and total look right.
- Match the week's receipts to your bank or card statement.
- Export a monthly copy for your accountant.
How ReceiptKit helps
ReceiptKit scans receipts from the camera, a gallery photo or a PDF, and reads the store, date, items, tax and total. You can mark each receipt Business or Personal and search by store or item.
It also has a tax report by quarter or full year, and exports for your accountant. There's no account: your data stays on your phone, and you can save a backup file.
How ReceiptKit helps
ReceiptKit scans receipts from the camera, gallery or a PDF, lets you mark each one Business or Personal, searches by store or item, and gives you a tax report and exports for your accountant. No account, and your data stays on your phone.
FAQ
Do I need to keep every receipt?
Keep a record for every expense you deduct. Receipts for personal spending you aren't claiming don't need to go in your business records.
Are digital copies of receipts okay for the IRS?
The IRS says electronic records must meet the same requirements as paper ones, and the system must give a complete and accurate record. Read Publication 583 before you discard originals.
How long should I keep business receipts?
Usually 3 years from when you file the return, and longer in some cases, such as 6 years if you left out more than 25% of your gross income. Employment tax records are 4 years at least.
What if I lost a receipt?
The IRS says you may be able to prove a payment with certain account statements, but a payment alone doesn't prove the deduction. Add a note of what it was for, and ask a tax professional about your case.
Sources
General information, not tax, legal or financial advice. Rules differ by country and change over time. Check the official source or a tax professional for your situation.