Do I really need to keep paper reciepts anymore?

[fastfredracing]

Here I am once again, stuffing piles of unorganized reciepts from the past year into plastic bins. Is there not an electronic record of every penny that goes in and out of my bank account? Would I be required by the IRS to save all this garbage, when I could probably pull up a record of every penny I spent in the entire year within a few hours time right from my keyboard?

[RANDY P]

Only if you pay with straight up cash I'd keep 'em. Otherwise submit your CC statements and bank statements.

rjp

[fastfredracing]

I can see a large bonfire in my near future, I have box up on box of this stuff

[RWebb]

keep it - if you get audited, it will impress them when you walk in with a hand truck full of boxes and say "Here are my receipts for the issues you raised."

[Zeke]

You'd be surprised at the metrics the IRS has for each type of business. If you're a roofer and do $750,000 in sales, they know just about how many squares of material you buy a year. So, if you don't fit, they will find out why. I'm using roofers as an example because at the horrendous workers comp rates (110% here in CA), it's common to load a roof with too much material, take it back down and use it for a cash job somewhere else.

Painters do the same and so do a lot of trades that use a lot of bulk material.

Your auto repair business will fit into some framework they have or you'll end up explaining why.

While we're on the subject, I will tell you of a brilliant scheme being done by a well known business that we all know about. When you drop off your widgets, he gives you a receipt out of sales book no. 1. When you come back to pick up your widgets, he waits to see how you are going to pay before reaching for sales book no. 2 or 3.

IRS sees only book number 3 with no pages missing, all in perfect order. All the supplies are general, not job specific.

[on2wheels52]

Originally Posted by RANDY P

Only if you pay with straight up cash I'd keep 'em. Otherwise submit your CC statements and bank statements.

I'm that guy. I end up with about half a shoe box of receipts every year.
Jim

[john walker's workshop]

been thinking the same lately. i see no reason to keep them.

[peppy]

I think if you are audited you will need itemized receipts for purchases. With the IRS you are guilty until you prove otherwise.

[RWebb]

correct - keep them for 7 years

[Zeke]

Originally Posted by RWebb

correct - keep them for 7 years

The difficult part of that is that if you get audited and you need to file an amended return as a result of the audit, they can go back 7 years from the earliest return that contains "mistakes."

[peppy]

I thought it was three years.

[Baz]

The looooong answer (courtesy the government):

Publication 552 (01/2011), Recordkeeping for Individuals

The short answer (courtesy the non-government):

How long to keep financial records

[LeeH]

One of my CPA friends uses the NeatDesk scanner. It worked perfectly when I tried it. It's quite spendy ($400 retail), but if I had to handle a bunch of receipts I'd have to have one.

[LeeH]

1.25.2012 - Today's woot... Refurb NeatDesk scanner for $250 + $5 shipping:

Woot® : One Day, One Deal

[McLovin]

How timely, I have a friend going through an IRS audit right now, and he was telling me about it a couple of days ago.

That's exactly the subject of what he's going through right now.

He said the IRS is demanding the paper receipts. Showing it as a charge on an AMEX card, or bank statement, or showing a cancelled check, isn't enough!

Crazy, but true.