Here’s What the IRS Accepts
Tracking receipts is essential for keeping accurate records, especially when claiming deductions. But what if you lose a receipt? Don’t panic. The IRS allows alternatives, though it’s important to keep these records as thorough and detailed as possible.
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Bank Statements: If a receipt is lost, a bank or credit card statement showing the transaction can help verify a purchase.
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Credit Card Transactions: Similar to bank statements, credit card transactions show the date, vendor, and amount spent.
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Expense Logs: If you didn’t get a receipt or lost it, write down the expense immediately in a log or digital app (e.g., Expensify). Your log should include the amount, vendor, date, and business purpose.
Remember, the IRS is more likely to disallow deductions that aren’t well-documented. That’s why you should track your receipts as soon as you make a purchase. Apps and cloud-based systems make this process easier and more efficient.
If you can’t provide a receipt, you’ll need to show that the expense was necessary and related to your business operations. Without sufficient documentation, you may risk disallowance of the deduction.