Receipts: to keep or not to keep?

August 2, 2006 4:27 PM

I have been keeping all of my receipts for some time now. Every day, I enter them into my money tracking system (presently just a text file where I capture date, payee and amount). Then I file the receipts away in folders by month. My question: does it do me any good to save the receipts, or is having the data good enough?

FYI: these are just personal receipts, not business (I know to save those). I've never had to bring out individual receipts for tax purposes before, but my understanding is that if I got audited, having all my receipts would be very helpful. Is that true?

posted by ivarley to work & money (11 comments total)

If you're audited, the tax man likely won't care about receipts for day-to-day purchases unless they're for items that show up on your tax return.

I generally only keep receipts for larger items (anything that costs more than a hundred bucks or so) because I get an additional year's warranty from my credit card, as long as I have the original receipt and charge slip. It's also a good idea to have receipts for larger items if you ever need to file an insurance claim (after a fire or flood, for example) - they're one way of proving what items you owned and how much you paid for them.

Unless you like keeping track of lots of slips of paper, retaining every receipt for every purchase probably isn't worth the trouble. Tracking your spending, though (which you're doing) is worthwhile, but only requires you to keep receipts until you transfer the data into your tracking system.
posted by gwenzel at 4:42 PM on August 2, 2006

I do something similar with my purchases, but rather than filing them, I do a monthly scan of all the receipts, and file them digitally. This works much better for me, and in the case where I have needed to take something back/send in a warranty claim, etc. the scanned copies printed out have worked just fine.
posted by jcummings1974 at 5:02 PM on August 2, 2006

Well, I just lost my power for four days, and the electric company initially was going to require receipts for spoilage claims. They eventually changed their tune. But if they had stuck to it, I would probably have only been able to claim $4.67, because I don't hold onto grocery receipts. Made me want to keep all receipts at least for some finite period of time. Never know when someone might offer to reimburse something.
posted by lampoil at 5:13 PM on August 2, 2006

I use MS Money and online banking (B of A) compulsively, and I throw away most receipts as soon as the transaction electronically clear the bank. Exceptions are anything that I might return in the next 30 days (esp. clothing), anything I would want to claim on taxes (gift-in-kind contributions, nonreimbursed business expenses) and electronics/large purchases.
posted by Sweetie Darling at 6:26 PM on August 2, 2006

I keep all cash and credit card receipts, organized in monthly envelopes, with my tax year stuff. I keep the tax year stuff in a file folder/plastic file tub system. I keep 7 years worth of paper, and I dump the detail stuff in the eighth year, keep the tax returns and any long term warranty, instruction manuals, etc., and store that in summary tubs, while recycling the oldest detail tub to become the current year tub. I'm 54 years old, have been doing this for 26 years, and my whole financial history (since I started this) fits in 11 tubs (7 full years back to 1999 at this point, and 4 summary tubs back to 1979).

For an apartment dweller, this might be a lot of paper, but it all fits under one end of the workbench out in my garage, with room to spare. I keep some off-site copies of electronic backups of my computer versions (mostly Excel file) of this stuff at a friend's house, on USB attachable backup drives, and we exchange spare drives once a month or so, as an offsite strategy.

The value of receipts in an audit is simply that, if you can show how you got your numbers, they stop questioning your numbers. When I was audited in the mid-90's, it took 30 minutes to get across to the auditor that I had backup, and I was out of there, with no adjustment or penalty, and I generally itemize, and file Form 1040 myself, with schedules, and I take every deduction I possibly can. I hate paying taxes.
posted by paulsc at 6:54 PM on August 2, 2006

I have six file folders labeled with months (Jan/Feb, Mar/Apr etc) and file receipts there. Every two months when I move to a new folder, I empty out the previous year's receipts and shred them. I have sometimes found it useful to be able to find a receipt 30 or 60 days later; once or twice I've dug around for a receipt up to six months old. The labor required to file them for a year is so little that it seems worth it to me for those very rare times when it is helpful.

I file things that might be tax-related, major purchases, warranty-related things, home repairs and improvements, and medical expenses all get filed separately.
posted by not that girl at 6:56 PM on August 2, 2006

I photo copy them - a few at a time onto standard 8.5x11 paper - then 3 hole punch them and put them in binders year by year. I'm a realtor, so I have tons of receipts for meals, auto expenses, etc.
posted by thilmony at 7:12 PM on August 2, 2006

What financial records to keep and how long to keep them.
posted by jdroth at 9:54 PM on August 2, 2006 [2 favorites has favorites]

You could get more mileage out of your purchase history by keeping your records in a spreadsheet instead of a text file. Then you could do things like find out how much you spent on dining out last year, or track how a change in your income correlated with a change in the amount of one type of product you buy.
posted by reeddavid at 2:52 AM on August 3, 2006

I file any tax related receipts with the tax return itself. With other receipts, why are you saving them? If it's for warranty reasons, only keep receipts if you might have a warranty claim. If it's because you might return something, keep the receipt only until you decide to keep the item. If you want to analyze your spending, several posts above have great ideas.

The IRS only wants documentation for tax-related items, like expenses you deducted. If you don't itemize, or didn't claim a purchase as an expense, the IRS doesn't need those receipts.
posted by theora55 at 8:59 AM on August 3, 2006

Thanks for all the advice. I think I'll continue what I'm doing (filing them for a year) because it requires no mental energy. What I will do, though, is keep a separate file for special reciepts:

- tax-related items
- purchases over $100
- warranty items
- home repairs and improvements
- medical
- auto care / repair

That way, when I pitch receipts after 1 year, I'll know the important ones are already separate.

reeddavid: I know, I could keep it in a spreadsheet, and did for a while. The text works for me for now, as it's more lightweight and I could easily transform it to spreadsheet form at any time.
posted by ivarley at 11:48 PM on August 4, 2006