Best Practices for Managing Paper Receipts

Question

I'm curious to get some input from the community on best practices for managing paper receipts, whether personal receipts or business-related receipts. For example...

• What are the arguments for holding onto and filing away paper receipts?

• In what situations does it make sense and not make sense to hold onto paper receipts? (For example, if you have a digital duplicate of a paper receipt, it might not be necessary to hold onto it?)

• Related to the prior question, when and how are receipts useful when it comes time to file your taxes? (For example, is it necessary to have receipts for everything in case you're audited?)

• Is having a bank card or credit card record of a transaction a sufficient substitute for having a full-blown receipt?

• In situations where it does make sense to hold onto paper receipts, how long should you hold onto them for?

• Finally, what are some apps and/or systems that help streamline this process?

Answer 1

I store all my receipts digitally, and make sure to input them into accounting program sooner than later, just so I don't forget about it.

For practical purposes, the two important things are:

1. Easily getting totals per category at tax filing time.
2. Being able to dig up a particular receipt later on.

Any kind of a digital system makes this pretty easy, even just putting the sums in a spreadsheet and the receipts into files with the date in the name.

However, because it's easy enough, I also have a box where I stuff the paper receipts. I expect never to need them, but should something very weird happen to my computer and backups, they would be there.