Do you really need to keep every business receipt?

Maybe not. But there are a few situations where keeping the right receipts (and documenting them the right way) can save you a ton of stress—especially if you ever get an IRS notice or audit.

In this post, I’m going to break down:

• Which receipts you should keep (and why)
• Which ones you can usually skip
• What the IRS really cares about when it comes to deductions
• A simple, realistic receipt system that won’t leave you drowning in paperwork

And if you’ve ever found yourself staring at a credit card charge like “$42.17” from three months ago and thinking… what on earth was that? This is for you.

Quick Overview: What You’ll learn in this article

• The 4 categories of receipts you should always keep
  • Meals
  • Purchases over $75
  • Travel and mileage tracker options
  • Subscriptions and recurring tools
• Receipts you usually don’t need to keep
• The documentation mistake that gets people in trouble
• My “no shoebox” receipt system
• FAQs: receipts, audits, and digital storage

What the IRS actually wants (hint: it’s not a perfect shoebox)

Let’s clear this up: the IRS does not require you to have a Pinterest-perfect filing system.

The IRS cares about whether you can substantiate (prove) that:

1. You actually spent the money, and
2. The expense was ordinary and necessary for your business

Your bank and credit card statements can help prove the first part (that the transaction happened), but they often don’t prove the second part (what you actually bought and why it was business-related).

That’s where receipts—and even more importantly, documentation—come in.

So no, you don’t need to keep everything… but you do need to keep the right things.

The 4 categories of receipts you should always keep

1) Meals (and the business purpose matters more than the receipt)

Meals are one of the biggest “audit magnets” for small business owners because it’s so easy to mix business meals with personal meals.

Here’s the deal:

• Business meals are generally 50% deductible
• Entertainment (concerts, sporting events, etc.) is generally not deductible (even if you talked business)

But even if you have the receipt, the IRS still wants context.

For meals, you should document:

• Who you met with
• What the business purpose was
• When and where it happened

A receipt from Outback doesn’t prove you met a client. It just proves you ate at Outback.

Best practice: write a quick note right on the receipt (or in the “memo” field in your accounting system) like:
“Dinner w/ client Sarah re: Q2 campaign scope.”

That one habit is worth its weight in gold.

2) Purchases over $75

A common IRS guideline is:

• For expenses over $75, you should keep the receipt
• (Meals and certain travel expenses are exceptions—more on that below)

Examples:

• equipment and tech (laptops, monitors, printers)
• software and licenses
• courses, conferences, and professional training
• advertising and marketing buys
• contractor services or large business supplies

These tend to be your bigger deductions, and they’re exactly the type of thing the IRS will want to see if questions come up.

Even if your tax preparer doesn’t ask for the receipts, you want the ability to produce them later if needed.

3) Travel and mileage

Travel is another category where documentation matters.

Keep receipts for:

• airfare
• hotels
• rental cars
• parking, tolls, baggage fees
• rideshares/taxis

But again—your receipts don’t tell the full story of your financial records. You want to document:

• The business purpose of the trip
• What you did (conference, client meetings, etc.)

Mileage and vehicle expenses: pick a method

For vehicle deductions, most small business owners use one of two methods:

• Standard mileage rate (tracking business miles)
• Actual expense method (gas, repairs, insurance, etc.)

Which is best depends on your situation—talk to your tax pro before deciding. If you’re using mileage, the most important “receipt” isn’t a gas receipt—it’s a mileage log.

4) Subscriptions and recurring tools

Technically, small recurring expenses don’t always require receipts. But if you’re ever audited, having proof makes life easier.

The good news is: most subscriptions are easy to retrieve later through:

• email receipts
• account billing dashboards
• payment processor records

What I recommend:

• Keep at least your original purchase/renewal documentation
• Make sure you can explain what the tool is for (business purpose)

If you ever need to justify your expenses, it’s much easier to say:

“Yes, this is my scheduling software for client appointments,”
instead of,

“Uhhh I think I used it once?”

Receipts you usually don’t need to keep

Here are examples where a receipt often isn’t necessary (unless there’s something unusual about the purchase):

• Small expenses under $75 (except meals/travel)
• Utility bills (your statements typically work fine)
• Expenses where the business purpose is extremely obvious
  • for example, a clearly business-only software tool that you use regularly

That said, “not required” doesn’t mean “never helpful.”

If you can easily save it digitally, that’s usually the simplest approach—especially if you’re building a system that reduces mental load later.

The documentation mistake that gets people in trouble

The biggest issue isn’t missing receipts … it’s missing context.

If the IRS asks, “What was this for?” and you can’t answer confidently, that’s where tax deductions get challenged.

So for anything that could look personal (meals, travel, Amazon purchases, big-box stores), document:

• the business purpose
• who it was for
• what it supported in your business

The goal isn’t perfection. It’s being able to explain it later.

My “no shoebox” receipt system

If your current system is:

• a pile of paper receipts
• random screenshots of a payment method
• an inbox you swear you’ll organize later
  …you’re not alone.

Here’s the simplest system I recommend:

Step 1: Capture receipts immediately

When you get a receipt, do one thing right away:

• take a photo
• add the business purpose note (especially for meals/travel)
• upload/attach it to the transaction

Step 2: Use tools that make it easy to scan receipts

The easiest way to stay consistent is to use platforms that have receipt capture built in.

Two options that make this super practical for automatically scanned records (i,e., a mobile app):

• Business banking with receipt capture
• Accounting software with receipt attachment

For example, I use Relay for business banking, and they have receipt capture functionality built in—so you can attach receipts to transactions as you go. If you want to check out Relay and see if it fits your business banking needs, you can do that here: https://www.jamietrull.com/relay

And if you’re not sure which accounting platform is the best fit for your business (and you want something that makes receipts + bookkeeping easier), take my quick quiz here: https://jamietrull.com/accountingquiz

Step 3: Keep it simple and consistent

You don’t need to sort receipts into 47 folders. You just need to be able to retrieve them if needed.

A good rule:
If “Future You” can find it in under 60 seconds, you’re winning.

FAQs

How long should I keep expense receipts?

In general, keep supporting documents for at least 3 years after filing (and sometimes longer depending on circumstances). If you have asset purchases, major deductions, or anything unusual, talk to your tax pro about a longer retention period.

Receipt Management: Are digital receipts okay?

Yes—digital copies are generally acceptable. The key is that they’re readable and you can produce them if asked.

Forgotten or lost receipts: What if I didn’t keep receipts this year?

Don’t panic. Start now:

• download what you can from email and vendor portals
• add notes where you remember the business purpose
• start to capture receipts build the habit going forward so next year is easier

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Sponsor Disclaimer: This post may include affiliate or partner links. If you use them, I may earn a commission or referral bonus at no additional cost to you. I only recommend tools I believe can genuinely help small business owners stay informed, organized, and profitable. This content is for educational purposes only and is not a substitute for advice on your specific situation from your tax advisor.

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This transcript was generated from the video for your convenience, but it may contain typos or slight errors due to the transcription process. For the most accurate and complete information, we recommend watching the full YouTube video.

Receipt tracker for small business: do you really need to keep every receipt?

Do you really need to keep every business receipt?

Maybe not, but there are some key times where you might wanna hold onto those receipts to save you some stress and frustration later.

Especially if the IRS comes a knocking.

So, which business receipts do you need to keep? Well, which ones don’t you need to keep?

And how do you keep yourself from drowning in a sea of paperwork?

Hi everyone. Jamie Trull here, CPA and Financial Educator for true small businesses.

And if you’re a small business that wants to stay informed, organized, and profitable in your business finances, you are in the right place. S

o please make sure to subscribe and of course, make sure to stay until the end.

I’m gonna teach you my system for keeping my receipts and making things really easy.

Does the IRS expect certain report formats?

Okay, so let’s get one thing out of the way.

The IRS actually doesn’t care if you just have a whole shoebox of all of your receipts.

What they really wanna know is whether you can prove that those are business deductions.

And while bank statements and credit cards can show transactions, which is helpful to show that you actually did spend the money, they don’t necessarily tell the IRS what you actually spent it on.

And that’s where receipts can come in.

And that means you don’t need to keep everything, but you do need to keep the right things.

Receipt scanning app tips for receipts and expense tracking

So which receipts do you need to keep?

I’m gonna break it down into a couple categories and tell you why these might be the types of receipts that you should keep around.

Now, the first category of receipts that you’re gonna wanna keep is meals and entertainment.

Now, unfortunately, these are a little bit different. Meals are treated differently than entertainment is for tax purposes.

And entertainment like taking a client to a ball game or getting a suite at a concert, unfortunately isn’t going to count as a deductible business expense.

Anyway.

Can I deduct meals as business expenses?

However, meals are generally 50% deductible.

That said, there has to be a true business reason for the meal.

And when it comes to meals, receipts are helpful.

However, they don’t tell the whole story.

And that’s because even if you are deducting a trip to Outback because you took a client out to dinner there, the IRS doesn’t know whether or not you took your client.

Or you just went out with your family to enjoy a bloomin onion.

Tracking key information re: meals with clients

So in the case of meals, it is key that you don’t just keep the receipts, but that you actually write the business purpose of the meal on the receipt.

Or somewhere where you’re keeping it. So that might be in an accounting system where you just jot a note into the memo field.

Or you can actually write it directly on the receipt and take a picture of it in order for them to agree that this is an okay deduction.

The IRS under audit would wanna see: who you had the meal with, why this was a business meal, what that business purpose was, and when and where it happened.

This type of documentation is especially important when it comes to meals.

And that’s because just looking at the receipt really doesn’t tell the IRS anything as to why it’s truly a business deduction.

So keep those receipts, but more importantly, make sure you have documented somewhere the reason for the expense.

Receipt scanning and track expenses over $75 for expense management

The second category of receipts, you should definitely keep are purchases is over $75.

While you should generally keep receipts for meals, no matter the cost, you will want to keep receipts for any other expenses that are over $75.

So that could be equipment, software, licenses, courses, advertising, anything like that.

And these are often your largest deductions, so you wanna make sure that you are keeping those.

Now whether your tax accountant or bookkeeper cares to see them is completely up to them.

However, if you are ever audited, the IRS will definitely want to see them.

And once again, it’s a good idea, especially if it’s not completely evident by the nature of the expense, to document why it’s considered a business expense.

Smart receipts and expense categorization for travel and tax preparation

The third category where you should be keeping all of your receipts is travel and mileage.

Travel expenses should be documented with receipts for things like airfare, rental cars, hotels, and more.

And once again, we need to document what the business purpose of the trip actually was.

Just saving a bill from, say, Marriott, without any context as to why you were there in the first place and why it relates to your business, is not gonna pass muster when it comes to the IRS.

Now when it comes to mileage and car expenses, this is where you’re gonna want to talk to your tax accountant about the best way for you to capture those costs.

Should you track mileage or actual auto expenses?

Oftentimes, small business owners choose to go the mileage route.

Which essentially means that rather than keeping all of those receipts for all of the fuel that you’re putting in your car, instead, you are keeping track of the mileage that you are spending traveling from place to place for business.

Some business owners, however, do opt to deduct actual expenses on their vehicle.

So again, talk to your tax accountant about what makes the most sense for you.

What about receipts for recurring expenses?

And the fourth thing I would probably keep receipts for are those recurring subscription expenses.

Now, technically small recurring charges may not always require receipts.

However, if you are ever audited, making sure that you are showing them those receipts can help to validate the fact that they were business expenses.

Now, thankfully, in this day and age, a lot of times we get receipts to our email or we can log into a system, let’s say, and pull down a receipt at any time.

So that means that you don’t necessarily need to be saving every single receipt every single month for all of your subscription services.

Receipt capture systems to manage expenses and financial reporting

However, this is where it can help to have it at least documented somewhere.

Either in an accounting system or somewhere where you’ll be able to find it. What the purpose of that expense is.

When you DON’T need to save your receipts

Alright, so now let’s talk about what expenses you don’t need a receipt for.

So that would include things like small expenses under $75, unless they are meal or travel related.

In which case the dollar amount doesn’t matter.

You also won’t necessarily need receipts for things like utility bills because your statements should work in that case.

Additionally, it’s less important to keep receipts for something where the business purpose is very. clear just by the expense. S

o for example, if you’re using a software that is very clearly for your business use, you may not need to be keeping receipts for things like that.

Of course, it’s never a bad idea to save our receipts.

However, again, the most important thing is to be able to prove the business purpose of the thing you purchase.

So if that’s unclear by the nature of what you purchased, that means you probably should save the receipt and do a little extra documentation on top of it.

Receipt scanner apps and receipt capture workflow for expense tracking

And here’s one little bonus tip for you when it comes to travel expenses, because meals are taxed differently than other travel expenses like hotels.

You do wanna make sure that you are treating them differently.

So for instance, if you got that Marriott bill, however you had room service delivered to you, the IRS is going to want to see you deduct the room service as meals. And categorize the actual hotel stay as hotel.

On a practical basis, A lot of times we don’t do that as business owners.

If we see a transaction come through our QuickBooks as Marriott, we’re probably gonna put it all to hotel.

Categorize income correctly to avoid an audit

However, if we are ever audited, that is something that they would look at.

So it could make sense to go ahead and divide that out separately.

Or you can be like me and just don’t charge anything to the room and use your credit card for that separately.

So now with the practical question, how do we actually save and store these receipts without losing our dang mind?

Practical tips for the self employed or small business owner

Thankfully, there are so many different ways to do that in this day and age.

Now I wanna help you get rid of that shoebox of receipts and going forward, do this.

The more tech-forward way.

We live in a world where there are lots of digital ways to do this, and they can keep things organized without having total chaos on your hands.

That is why I love using systems that allow me to just take a picture of a receipt.

Usually after I’ve documented the business purpose on it and upload and attach it to the specific expense.

Receipt scanning app tools for expense reports

Now, you could do this in most accounting softwares, especially the ones that I recommend.

And there’s also some business banking platforms that will allow you to do this as well.

Specifically, my favorite business banking platform that I’ve talked about on this channel and that I actually use, is relay.

And they have this receipt capture functionality built in.

And if you make this a habit, that means no more digging through your email inbox trying to figure out what an expense was for $42 three months ago.

Final thoughts about implementing a receipt scanning app

If you’re curious about checking out relay further, definitely make sure to use my partner links so that you get some extra perks.

Jamie Trull dot com / Relay, or if you wanna dig in a little bit more to some of the accounting softwares that I recommend, they all have a receipt capture functionality.

You can check out my quiz to help match you with the right accounting software for your business and your needs at JamieTrull.com/accountingquiz.

Keeping your receipts does not have to be complicated, and you definitely don’t need to do it perfectly.

It’s about knowing what matters and having a system to keep you organized.

If you’ve got specific questions about whether you need to keep receipts for certain transactions, make sure to ask me down below and I’ll see you next time.