Managing Tax Receipts: How to Keep Your Records Organized

💰Tax deductions require proof and substantiation to claim. Keeping proper records is essential to avoid penalties.

📝Cash transactions under $75 do not require a receipt, but it's recommended to keep records for higher amounts.

💳Using a business debit or credit card and keeping digital bank statements simplifies record-keeping.

📱Digital receipt apps and scanning tools help store and organize paperless receipts.

🗂️Proper bookkeeping software allows attaching receipts and adding notes for better documentation.

What receipts do I need to keep for tax deductions?

—Receipts for cash transactions over $75 and any business-related expenses that require substantiation.

Can I keep digital receipts instead of paper receipts?

—Yes, digital receipts are acceptable if they contain all the required information and can be accessed for future reference.

How long do I need to keep tax records?

—Generally, three years after filing the tax return. However, it can be extended to seven years for specific circumstances.

Do all expenses qualify as tax deductions?

—No, expenses must be ordinary and necessary for your business to be eligible for tax deductions.

Do I need to keep receipts for business debit or credit card transactions?

—No, bank statements, credit card statements, or invoices are acceptable documentation for these transactions.

00:00Introduction to the importance of managing tax receipts and substantiating tax deductions.

02:40Explanation of what receipts are necessary for tax deductions and what qualifies as proper documentation.

07:32Focus on cash transactions and their receipt requirements, including the Cohan rule for transactions under $75.

09:20Benefits of using business debit or credit cards for transactions and how digital bank statements can simplify record-keeping.

11:20Introduction to digital receipt apps and scanning tools for paperless record-keeping.

14:40Importance of proper bookkeeping software with note-taking and receipt attachment capabilities.

16:00FAQ section addressing common questions about tax receipts and record-keeping.