Scanning Your Receipts Can Save Your Deductions!

Author: Keith Huggett

Throughout the year, we wine and dine our customers in the hope of building our businesses.  We take trips to conferences to further educate ourselves, to learn of upcoming expansions in software, laws, or simply the field in which we work.  During this time we collect receipts. TONS of receipts. In the US alone, we use 640,000 tons of thermal receipt paper per year. What do we do with those receipts? We put them in our purse or wallet. File them in a box or folder. Hopefully, we scan them so that they remain in pristine condition. But, what happens to the actual receipt? It fades...and fades, until it no longer exits, and is only a blank scrap of paper. When it gets to this stage, it is of no use to you.  It can no longer be used to substantiate the business dinner with your client, or the conference you went to in New York.  Travel and Entertainment deductions are some of the most difficult deductions to substantiate.

To help prove your case, should your return be audited, scanning your receipts is your best option. As most people carry a cell phone with them, there are several apps available that can help you by using the camera portion of the phone. Here are just a few choices:

Iphone:  Scanner Pro
             Genius Scan

Android: CamScanner
             Genius Scan

Information that you should include with your receipts:

1. Who you entertained
2. Why you entertained this person or people

The receipt should include this information:

1. The date of the engagement.
2. The location of the engagement.
3. The amount spent.
4. What was involved in the engagement - i.e., dinner, golf, etc.

While keeping the original receipt is necessary, it is always in your best interest to keep a backup copy.  In your business, you backup your computer for those "just in case" emergencies that you never want to happen.  Keeping a digital copy of your receipts is the same thing. It also makes things much easier for your accountant, come tax time.  If you would like advice on digitizing your receipts, the tax specialists at The Tax Office, Inc., would be happy to assist you.  If you are not tech savvy, The Tax Office, Inc., can take the scanning off your hands with one of our bookkeeping packages.  Contact us today if you would like to discuss either receipt maintenance, bookkeeping, or if you have any tax related questions.