The reasons for keeping receipts are many, and the benefits of doing so can potentially save you money in the long run. Keeping receipts is one of those habits that can seem like a lot of work initially but will eventually become an ingrained part of your routine. Let’s take a look at some dos and don’ts when it comes to managing your receipts:
Importance of Keeping Receipts
Keeping receipts is important for a variety of reasons. The first and most obvious reason is for tax purposes. If you’re eligible for a deduction this year, you may be able to claim it by filing your taxes with your receipts in hand.
The second reason to keep receipts is because they can serve as proof of purchase if something goes wrong with an item or service. This could help you get compensation from the company that sold the product or provided the service if there’s an issue with quality or performance after purchase (and assuming that they honor their warranty).
Thirdly, many people keep their receipts simply because they want them as keepsakes–a physical reminder of how much money they’ve spent over time on certain things like travel vacations or new clothes/shoes/etcetera!
How to Save Receipts?
There are several ways to keep your receipts. You can scan them and then store the scanned images in a physical file, or you can save them in an app or cloud service like Dropbox. If you choose to scan your receipts, be sure that they are clearly legible so that you can read them later on if necessary.
If you don’t want to scan your receipts, storing them in an app or cloud service is another option. There are many apps that can help you manage your receipts and invoices, including Expensify and Receipt Bank. Online invoice systems allow you to take pictures of your receipts or upload them.
You can also use a simple receipt generator to track the itemized expenses on each receipt and then generate reports based on that data. This is a great way to ensure that your business is reimbursed for all of its expenses.
If you don’t want to use an app or cloud service, you can simply keep your receipts in a folder on your computer or mobile device. You will still need to scan them so that they are legible if you need to refer back to them later on.
Do You Need to Save Receipts for Taxes?
The answer is yes, but only if you’re self-employed and can deduct business expenses on your return. If you’re an employee, the answer is no. Keep these things in mind:
- Business-related expenses are deductible only if they exceed 2% of adjusted gross income (AGI).
Expenses like office supplies and equipment are generally not considered deductible unless they are used exclusively by the business and not at home or elsewhere. However, there may be exceptions–for example, if your employer reimburses part or all of their cost (which would then be taxable), then that could change things up a bit! But don’t count on it!
- Don’t forget about charitable donations either!
A lot of people think they can’t claim these because they aren’t paying taxes anyway, but charities do have tax ID numbers, so make sure yours has one before making any donations this year!
Conclusion
Keeping receipts is a good idea, but only if you can organize them properly. The most important thing to remember is that receipts are not just pieces of paper; they’re also valuable tools for keeping track of your purchases and business expenses. That’s why it’s so important to organize them properly!
