Hi, I'm Candace
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It’s the 21st century. We live in a digital world. No one wants to keep hundreds of little scraps of paper throughout the year. So is it really necessary to keep that tiny receipt documenting the stamps you just bought at the post-office?
If you’re a business owner, freelancer, or anyone who is doing any type of side hustle, the answer is… maybe. Let’s break it down:
If your meal or travel purchase is under $75 the IRS does not require a receipt.
However, this only applies to payments made via credit card, debit card, Paypal, etc. This is because even without the receipt, you can still show proof of purchase at a specific location at a specific time. You should keep the receipts for all purchases paid in cash.
And it’s never a bad habit to just keep all receipts. Especially now when apps and technology make saving receipts so easy…
When it comes to keeping the receipts, there are better solutions than just shoving a crinkled piece of paper in your purse or wallet. Many stores will email you your receipt that you can save. There are also apps available, like Expensify, that allow you to take a picture of a paper receipt and store it digitally so you don’t have to store it physically.
However, at the end of the day, none of this matters unless you are properly recording these expenses throughout the year. This means you need to be utilizing some type of system, be it a simple spreadsheet, accounting software, or outsourcing your bookkeeping. With this crucial practice alone, you’ll ensure you don’t miss any critical tax deductions and have the documentation to support your business in the unlikely event of an IRS audit.
Candace is the founder of NewWay Accounting and is a CPA who specializes in working with fellow entrepreneurs. She strives to take the fear and anxiety out of taxes and help empower small business owners to feel more confident and in control of their finances.
If you are looking for more DIY bookkeeping and tax help, be sure to check out her FEARLESS FINANCES WORKSHOP!
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