I've been an independent contractor for about 2 months now. I'm saving receipts for all my business-related expenses, and I use Mint.com to track all my personal finances -- Everything business related is "tagged" as "LLC" (I'm not really an LLC, but I aspire to be =D). I also recently found Expensify.com, which has an awesome Android app for taking photos of receipts, and I've been using this as well.
So all in all, I have my original receipt, my mint.com transaction history ("Find all transactions tagged as LLC"), an Expensify transaction history (which is the same thing) and pictures of all my receipts in Expensify. I'd like to simplify all this; If I were to get audited, what would I need? Which of these should I keep using, and which are just extra work for no gain?
Some people have told me to keep the original physical receipts. Some people say a summary sheet of income/spend is enough. Do I need my original receipts? Are photos of these receipts enough? Do I need to have the itemized list of expenses (e.g. at McDonalds, $1 double cheese, $1 fries, which means I need to keep receipts/photos) or just a per-store transaction history ($2 at McDonalds, $2 at Burger King, in which case receipts are overkill and Mint.com's logs would be sufficient)? Do I have to prove what I bought, or just where I spent the money?