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It’s tax time and you don’t have receipts for last year’s business expenses. Now what? You can still claim deductions on your taxes without receipts for every transaction. Keep in mind that you don’t have to send your shoebox full of receipts to the IRS. You’ll only need them if you’re audited (which can happen up to 6 years after filing your taxes). However, it’s best to find documentation of every deduction you plan to take now rather than risking not having records if you’re audited a few years down the road.
If you don’t have original receipts, other acceptable records may include canceled checks, credit or debit card statements, written records you create, calendar notations, and photographs.
The first step to take is to go back through your bank statements and find the purchase of the item you’re trying to deduct. Print it out or save a file and make a note of when and where the item was bought, as well as how much you paid for it.
When it comes to travel expenses and business trips, if you don’t have receipts, you’ll need to do the same thing. Review your credit card statements, mileage logs, and calendar notations for records. For more information about what you can deduct when it comes to business travel, check out our detailed business trip deduction guide.
For other business-related purchases without records, it is wise to take a picture of the item purchased then write down where you bought it and how much it cost. If you know the name of the store, look up the item on the store’s website and write down the cost or take a screenshot of the listing.
Another way to account for lost receipts is to show a pattern of spending. If you started keeping records for your office’s monthly staff lunches halfway through the year, you could use your average expenses for those months to estimate the expenses for the months you didn’t track.
If you are trying to gauge how long to keep these records, here is a helpful guide:
Download a printable version here.
Unfortunately, there is no perfect way to make up for original lost receipts. However, with today’s technology, you leave a record of spending everywhere you go. If you find yourself in the situation of not having last year’s receipts, vow to create a more organized tracking system from here on out so that you don’t run into this problem in the future. Here are a few ideas on tracking receipts for your small business this year.
If you are looking to eliminate the headache of your business taxes, reach out to our team. We help over 10,000 businesses across the US manage their bookkeeping and taxes. We would love to help!
1. Can I still claim deductions without receipts?
Yes, you can claim deductions even without receipts. Alternative records like canceled checks, bank statements, written records, calendar notations, and photographs are acceptable.
2. How do I document purchases without original receipts?
Review bank statements or credit card records to identify purchases. Note down details like dates, amounts, and vendors. For travel expenses, utilize credit card statements, mileage logs, and calendar notations.
3. What if I can’t find records for business-related purchases?
If records are unavailable, take a photo of the item purchased and note the details. If known, retrieve information from the store’s website or use spending patterns to estimate costs.
4. How long should I keep records for tax purposes?
Refer to a helpful guide such as KeepItFor-01 for record retention guidelines. It’s crucial to maintain records for the recommended duration to ensure compliance.
5. How can I improve record-keeping for future tax seasons?
Invest in digital tracking systems and vow to maintain organized records to avoid similar issues in the future. Consider ideas for tracking receipts to streamline your small business’s financial management.
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