OK, real talk: Is there anything more confusing than doing your taxes? It’s something we’ve all gotta deal with, but the forms, the numbers, the terms — it can feel pretty overwhelming. Tax Day is on April 18th, and it’s coming faster than we’d like. . . which is exactly why HelloGiggles compiled our thorniest tax questions and reached out to experts to find out what’s what. With our eight-part tax series, you’ll be *totally* prepared for Tax Day! First, we tackled the basics of doing your taxes; then, we went over what we needed to know about deductions, dependents, payments, and refunds. Next up, we’re talking about receipts — and how they can help your tax filing process.
Do I really need to save every single receipt I get?
There’s clearly a reason why receipts are a thing, but do we have to save every single one in a box filled with financial regret?
“The easy answer is yes,” said Jonathan Horn, CPA, CGMA, lead technical manager of AICPA Tax Policy & Advocacy. “In order to prove that you were entitled to any deduction or credit taken on your tax return, the IRS will want to see proof (receipt, cancelled check, credit card statement). It’s best to hold onto all your receipts until after you file each year’s tax return.”
Even the receipt for the pack of gum you bought at the gas station last week? While that may seem excessive, Horn said that it’s better safe than sorry. “While you may not realize that a particular expense is a legitimate deduction, your tax professional will,” he explained. “Having all your receipts available will avoid missing out on any of these deductions.”
After your returns are filed, you can toss out all the receipts other than the ones that serve as support for any deductions and credits you claimed on that return. “Receipts for capital purchases (stock, property, computer equipment) should be retained until you dispose of the asset,” he said. In other words, keep the receipts for your new laptop until it’s time to get a new one.
Added Stephanie Gruenhagen, Tax Attorney at Davidoff Hutcher & Citron LLP:
OK, the prospect of saving *all* receipts may be a little overwhelming to some, so it may help to know all the ones that you absolutely, 100% should be filing away for tax season. The short answer to that? Anything you think you may be able to deduct.
If you’re extra concerned about your receipts, you can also check out the IRS rules on how to keep adequate records here. But on the plus side, seeing allllll those receipts in one place may help you to stop splurging on random stuff on Amazon. . .
What if I didn’t save my receipts?
OK, so taxes are due in one week . . . and you just realized that you didn’t save a single receipt. What now?!
Don’t fret! There are a few options if you’re receipt-less. Gruenhagen advises to contact your bank or credit card company to request old statements. “A lot of credit card companies will provide you with a year-end report that lists all of your purchase and categorizes them, print that and hang on to it,” she explained. “If you take a deduction and the IRS audits you and you can’t provide support for that deduction, it will not be allowed.”
Amy Yiqiong Wang, CPA senior technical manager for AICPA Tax Policy & Advocacy, also suggests contacting the organization or business from which you made a larger purchase. “If you did not save receipts for significant expenses or large charitable donations, try your best to retrieve a duplicate copy of the written documentation,” Wang told HelloGiggles. “Oftentimes organizations and businesses keep digital records now and they can easily send you a new copy of your receipt!”
And once again, we think: Thank goodness for technology.