7 Tips for Keeping Receipts Organized for Tax Time

September 12, 2021
Published by Gonzales Group CPA

Who hasn’t gone on a mad search for receipts combing through pockets, desk drawers, trash cans etc. – especially if your CPA in San Antonio is requesting them? We feel your pain. On a personal level, it may just mean you can’t return that new pair of shoes but for small businesses the implications can be more significant.  If you have a CPA in San Antonio, you’re likely fully aware of this.  Every year, when tax time rolls around, your receipts determine your eligible deductions and are required in the event of an IRS audit so keeping ALL business receipts is particularly important.

We’ve provided some tips below to help you keep your business receipts in order for tax time.

7 Tips for Keeping Receipts Organized for Tax Time:

1.     Keep All Receipts

If it wasn’t already clear, keep all receipts. When you get that coffee in an airport, wait around for the receipt and store it in the same place each time. More and more, businesses are offering digital receipts sent by email or SMS. This is another option that is paperless and easy to search. We highly recommend digital receipts for record-keeping!

2. Make Notes on Receipts

This is a great way to jog your memory and also to help you file your expenses once back at the office or submitting them on line. This is particularly useful when it comes to entertainment and dining expenses.  Jot down any important info like client name, event etc. to provide yourself (and your CPA in San Antonio) with context come tax season.

3. Take a picture…

It lasts longer. How lucky are we, in this day and age, to have a camera with us at all times? Use your phone to take a picture of every receipt issued so if you misplace the paper version, you still have a record. This is the simplest way to use your phone for accounting purposes but there are also countless apps available to help you scan and track your expenses. It is worth exploring them as well.  Choose what works for you and stick with it.

4. Retain receipts for a full six years

All the more reason to do as advised in #3 – take pictures! Alternatively, scan all your receipts. Either way, file them safely (digitally). The IRS can audit you up to six years back and the chances of an Office Depot receipt still being legible years from now are low so be diligent about saving pictures and/or scans of your receipts for a minimum of six years.

5. Keep a daily business journal

Though adding something to your to-do list might seem counter-productive, this need not be difficult. In fact, it could just be more comprehensive calendar-keeping. We recommend keeping as detailed a schedule as possible in Outlook or Google calendar. This can help substantiate and reconcile your receipts at tax time.

6. Don’t rely on credit card statements or cancelled checks

Though it is important to keep both of these, the IRS does not deem these sufficient without receipts attached. In other words, both are required as proof in the event of an audit.

7. Minimize use of cash

Cash is hard to track and difficult to reconcile so whenever possible use a credit card or debit card. Ideally, ones designated specifically for your business spending.  This is the best way to track your spending but, as mentioned above, credit card/banking statements must still be paired together with your receipts for optimal record keeping.

These tips are simple and easy to commit to and will ensure your small business is adequately prepared for the next tax season or audit. Give them a go!

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When choosing a CPA in San Antonio for your small business needs, make sure you select one that fully understands your organizational goals, company culture and best industry practices for optimal results and an enduring relationship.

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The Gonzales Group is accepting new clients! Contact us for more information on small business taxes and to schedule a complimentary consultation.

Categorised in: 7 Tips for Keeping Receipts Organized for Tax Time

This post was written by Gonzales Group CPA