By Jason Watson (Google+)
Not always, but there are some rules. First, for any single transaction over $75 you need to demonstrate that you paid for the expense- canceled checks or credit card statements are satisfactory. If you pay with cash, you must maintain a record or logbook of transaction (a dated receipt with a company name or signature is your best bet).
Second, the record or receipt must show the amount, date, place and essential character of the expense. For example, ‘$100.00 on Aug 16 at Staples for copy paper.’
Please understand that regardless of the ‘$75 rule’ the IRS will still require substantiation of the expense. Therefore, our advice, and the advice of other tax accountants, is to keep all receipts over $10.
This is a huge generalization. Please read our tax article on recordkeeping at-
Or visit other KnowledgeBase FAQs that expand on the recordkeeping requirements.
To clarify, we will not need copies of your records or receipts. This is only in the event your tax return is examined by the IRS.
In looking ahead, our advice to small business or rental property owners is to use a separate credit card for expenses associated with your job. We understand that using separate credit cards might create some hassles, but ensuring that all your job related expenses are properly documented and more importantly deducted on your tax returns should outweigh the inconvenience.