What and how long?
The old concept of keeping all receipts and pitching them in an old shoe box is not a bad idea. This means you only have to deal with this box once – Tax Time! The IRS has different requirements concerning receipts based on the type of deduction.
IRS Requirements for Cash Contributions: You cannot deduct a cash contribution, regardless of the amount, unless you keep as a record of the contribution: a bank record (such as a canceled check, a bank copy of a canceled check, or a bank statement containing the name of the charity, the date, and the amount) or a written communication from the charity. The written communication must include the name of the charity, date of the contribution, and the amount of the contribution.
If you make a donation of tangible goods you must have a receipt. The receipt should have the name of the charity, list of items donated, date, and estimated value. Estimated value would be calculated by the actual price you would receive if you were to sell the items yourself. The IRS requires an additional form to be completed if the donation is valued at more than $500. If this is the case, you need to fill in all of the appropriate information on our Client Organizer.
Receipts for travel related items are not required unless the item costs more than $75. If the item is under $75 all you need is a written record of this purchase. An entry in your logbook or on your calendar would be acceptable by the IRS. If the item you purchase is more than $75, then you need to have or have access to the actual receipt. It is always a good idea to purchase these items on your credit cards so if you lose the receipt, you can get a copy of the transaction from the credit card company. The only time the $75 rule doesn’t apply is expenses for small businesses or rental properties. These always require receipts.
Make sure that you keep your tax returns and supporting documentation for at least three years from the year they are due. In other words, keep four years’ worth of records. The IRS has a three-year statute of limitations.