​​Your Guide to Receipts: What to Keep, How Long, and Why It Matters

Let’s talk about receipts — one of those small, unglamorous habits that quietly separates business owners who are in control from those constantly playing catch-up.

Which Receipts Do I Need to Keep?

Legally, the IRS requires you to keep receipts for any expense of $75 or more. That’s your baseline.

If you want financial transparency, keep all receipts. Jen, CEO of Godiva Financial, our go-to tax expert, advises: “A complete record gives you the confidence to make decisions and the defense if something goes sideways.”

How Long Should I Keep Them?

Rule of thumb: four years. The IRS audit window is three years from the date you file, so four years of receipts covers you, should they come knocking.

There are situations where keeping them longer is smart.

For example, if you purchase a depreciable asset — like equipment, real estate, or vehicles — you need to keep the receipt for as long as you own the asset, plus 3 years after you sell or dispose of it. Why? Those receipts establish your cost basis, which determines how much you owe (or save) in capital gains tax.

To cover all contingencies, keep them for 7 years after the business closes. Cloud storage is cheap; peace of mind is priceless.

I’m busy. Why is this important?

1. Audit Protection 

If you’re audited and can’t produce receipts, expenses get added back as income — which means extra taxes. Simple as that.

2. Legal Defense 

Receipts can be your lifeline in lawsuits or disputes. We’ve had clients caught in legal battles who relied on receipts to prove damages or losses. You can’t plan for this, but you can be prepared.

3. Loan Applications 

Lenders rarely see the full picture. I learned this the hard way when refinancing an investment property. Because I’d done substantial renovations myself, the bank treated them as recurring maintenance, not improvements. Their P&L formula assumed I’d be gutting the kitchen every year, until I showed them the receipts. Boom: problem solved, loan approved.

Think of receipts as micro-insurance. They cost almost nothing but protect you from a world of pain later.

Pro Tips for Keeping Receipts

1. Go Digital. Immediately. 

Paper receipts fade, wrinkle, and disappear. Snap a picture the moment you get it. Done.

2. Record It Now, Not Later. 

If you wait, you’ll inevitably lose some. Make saving receipts a habit — like brushing your teeth. Small, consistent, automatic.

3. Automate Whenever Possible. 

You have better things to do than chase receipts. Many tools can make this nearly effortless (see below).

Tools for Making Receipt Management Less Annoying

The Paid Tool Route (Best for volume & value) 

Many accounting platforms have receipt management add-on packages. Plus there are dozens of purpose-built platforms to chose from. We don’t have a specific recommendation, so we’d love to hear your likes/ dislikes. 

The Hyperspace Route (Best if you’re busy) 

We can handle receipt tracking and filing for you. Not the cheapest option, but because we already know your books and your business inside-out, it’s the lowest effort. You focus on running the business; we handle the paper trail.

The Bootstrap Route (Free + Effective) 

If you use Gmail:

1. Create a Label called “Receipts”.

2. Create a custom filter to sort any email with “receipt” in the subject line under that label.

3. Snap a picture of your physical receipt, email it to yourself with “receipt” in the subject line, and boom — it’s stored, searchable, and backed up forever.

Final Thoughts

Receipts aren’t sexy, but they are important. Treat them like flossing: annoying in the moment, way better than a root canal. A few minutes today keeps the IRS, lawyers, and lenders from ruining your tomorrow.