I Got The Receipts
I Got The Receipts
Published on Jan 06, 2024 | Categories: Audit & Compliance, Bookkeeping
Business owners, do you really need to keep all those receipts? The short answer is: YES.
As a small business owner, you're constantly making purchases to keep things running smoothly. And let’s be honest—most of us pay with a debit or credit card. Because really, who even uses cash anymore in 2024?
So yes, your transactions show up on your credit card or bank statement. But here's the problem: bank statements alone are not enough to prove your expense qualifies as a business deduction.
Here’s why receipts matter:
Let’s say you spend $375 at Costco. Your bank statement just shows a charge to Costco. But the IRS can’t tell whether you bought office supplies or a pallet of tequila.
Without the actual receipt, the IRS may deny the entire expense during an audit.
To ensure your expenses are legitimate and deductible, your records must clearly show:
- Who was paid
- When the expense occurred
- What the payment was for (itemized)
If your bank provides canceled check images, that’s helpful—but don’t forget the memo line! Write down what the payment was for.
Keep all your receipts for at least 3 years. It’s not paranoia, it’s protection.
Better safe than sorry. Capisce?
Comments
No comments yet.