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michaelpa... michaelpa...
 
M$1 June 12, 2009 03:25 PM

Do I need to keep paper receipts for my business or can I simply scan them in?

I'd simply like to know if it's okay for me to simply scan and shred my business receipts and other documents for record keeping purposes and for the IRS. I'd like to move to a completely paperless office.

If there any details you need, please ask for them in your answer and I will reply with haste.

Also, the best answer will include some site(s) I can read that go into further detail on this subject--what I absolutely MUST keep in real paper, and what I can have scanned-only.
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Interesting: timcadieux, frednikgohar

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robbrown robbrown
 
 June 12, 2009 03:38 PM
Here's how I work:

I have a drawer in my filing cabinet that has 1 folder per month. Every time that I receive a receipt, I toss it through the scanner and then place it in this month's file folder. I put the newest receipts at the back of the stack in the folder so that they're stored chronologically within the month. This makes finding one easy and quick.

I take the digital copy and put it into my accounting software properly.

Every year with my taxes, I put all of the folders that contain receipts in a file archive box and toss it in the closet after labeling it with the year.

So this way, I have the easy to handle digital copy... and if the tax man or my accountant ever question me... I can simply pull out the box and they can go to the month.

Not only does the IRS like original receipts... most stores REQUIRE the original if you need to receive a refund or invoke a warranty.
Asker's Rating:
• It's a great answer that completely answers my question. It didn't have any links, which I stated was a recommendation for a best answer, but the answer was good enough and made enough sense that no links were required; sounds like a great system, and I determined that maybe it's okay to go paperless in my personal life, but for my business I better stick to keeping the originals around just in case.


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michaelpau... michaelpau...
 
June 12, 2009 03:47 PM
Sounds like a great system. Thanks for the answer!

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blight blight
 
June 12, 2009 03:31 PM
Actually my step dad runs a small business, doing glass / window etc etc,
and we keep track of it all 100% on the computer, we just scan it and save it on an external hard drive..
He has been doing this for 8 years, never had problems with his taxes or anything like that.. But it is reccomended by the IRS to keep the copies somewhere.
" Have copies and the originals they say "

IRS Resources @ www.irs.gov (Business Expense Receipt Reporting)

I d go into detail but i am in a class atm ; )
But no , you do need to keep the originals, or its easy to scam the IRS.

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ssmacd ssmacd
 
June 12, 2009 08:16 PM
Simple answer: you don't NEED them, but it will make your case on audit more defensible, so it depends on your risk threshold. It is your responsibility to have 'adequate documentary evidence"--and what is adequate is up to the IRS...or the Tax Court if it gets that far.

The specifics as to what the IRS requires for electronic storage of documents can be found on page 8 of this IRS newsletter:

http://www.irs.gov/pub/irs-irbs/irb97-13.pdf

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mysterygir... mysterygir...
 
June 12, 2009 09:40 PM
Having the original is a much safer bet, people can say silly things like you have altered something on it. (sorry this is short but it is to the point ) (^_^)V

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