The following is provided for informational purposes only. The information below may not apply to your specific situation so always consult an attorney. Use of this information does not create an attorney-client relationship between you and the Law Office of E.C. Lewis, P.C., home of your Denver Business lawyer.
Do I need to keep receipts under $75?
In the 1990s, under the guise of helping business owners, the IRS stated it would no longer require receipts for meal and entertainment purchases under $75. However, if a business owner decides not to keep the receipt, he or she must have a log that includes the date, time, place, amount, who was involved, and the business purpose of the expense. If audited, the IRS may also request substantiating documents verifying the expense, including bank or credit card statements.
If a business owner keeps receipts, he or she should write who was involved and the business purpose on the receipts (and the date, time, place and amount if that is not already on the receipt). Although it is nice to have a log of the expenses and bank and credit card statements, with the receipts it is not absolutely necessary.
So the obvious question is, if I am audited and I am going to need to produce a log of all the expenses and statements to verify I actually spent the money, why not just keep the actual receipts? Well, the answer is quite simple. Keep your receipts. The IRS stated you do not have to keep the receipts, but that does not mean that if you are audited and do not have them, that they will allow the deductions.