To add a receipt to a transaction, just open its detail view and attach an image or PDF there.
Should you keep receipts?
For each business expense, the IRS wants you to document:
- The amount
- The place
- The date
- The “character” (category) of the expense
If you're ever audited, you may be asked to provide proof of your expenses. Things like store receipts, canceled checks, and bill copies are all sufficient. Tax experts say physical or digital receipts are acceptable, so you can choose whichever method works best for you. For digital receipts, the IRS has minimum requirements. Receipts must be:
- Readily stored
- Reproduced for the IRS when necessary
Because business deductions usually lower the amount of tax you owe, the IRS may pay special attention to them. Cash expenses claimed but not documented are a particular area of concern. Whenever you can, try to keep good records about your expenses, and be sure to record your cash transactions. (Tip! You can manually add these expenses in Transactions.)
When you don’t need documentation
The IRS has exceptions for requiring receipts in specific categories: travel, gift, entertainment, and car expenses. These exceptions are detailed in IRS Publication 463 and are:
- You have an expense, other than a lodging expense, less than $75 dollars. (You’ll need documentation for all lodging you claim as a business travel expense.)
- You have a transportation expense for which a receipt is not readily available.
- You have a per diem allowance from your employer that includes meals or lodging. (Being self-employed, you can use federal per diem standards in lieu of an employer.)
Examples of these exceptions might be:
- Bridge and roadway tolls.
- A taxi, Uber, Lyft, or other rideshare charge.
- Tips for helpful hotel staff.
- A $40 happy hour charge with a potential client. (Although you might not need the actual receipt, you will need to document the client and the business purpose of the meeting.)
- A $25 box of donuts you deliver as a gift to your accountant for recommending QuickBooks Self-Employed to you.
How our app helps
Our app helps you with record-keeping and receipts at the individual transaction level. It:
- Automatically stores info about the date, amount, and place (payee/vendor)
- Smartly suggests an appropriate Schedule C category
- Gives you the ability to add notes (particularly useful for meal/entertainment expenses)
- Lets you attach a receipt or document
If you have specific questions about receipts and record-keeping for tax purposes, we recommend you talk with a tax professional or an accountant.