I'm a college student, and in the past my parents have generally handled my finances for me so I haven't had to think about them. But I'll likely have to start doing my own taxes soon. Does that mean I need to start keeping my receipts (for food, etc.)? Or is it just a good idea? All the money I spend comes out of an account that I can track pretty easily online, so I'm not sure exactly what I need receipts for.
You don't need to keep receipts for most things, and if you are not going to itemize your deductions (which as a college student, you probably won't), you need even fewer. Things that you should always keep:
- Your last pay stub for the year, to check against your W-2 (optional, but possibly useful).
- Anything related to investments (buying/selling stock, IRA contributions, etc.)
- Anything related to buying/selling property.
If you are itemizing your deductions, you want to keep receipts for anything that you can itemize. Some common things are:
- State and local property and income taxes
- Medical expenses
- Charitable contributions
- Unreimbursed job related expenses
Another thing that you should do, but few people do, is keep track of your online purchases, since many states require you to pay sales tax on those purchases. Of course, the state has no way of knowing what you buy online, so it is all done on the honor system.
You need receipts only if you claim deductions in the itemized deductions section based on them.
You itemize deductions only if your claims exceed the standard deduction (which for a single person was $5,800 last year). Even then, you need receipts for everything only if you claim sales tax as the deduction (you have to buy really a lot to pass $5K with sales tax...). I would expect people to pay more in state income taxes than sales taxes (you can claim either this or that, not both).
For food - there are no taxes (at least here in California), so nothing to deduct anyway.
In any case, you can always scan your receipts and keep them in the computer, for just in case, but IMHO it's waste of time, pixels and gigabytes.
Here's a question which deals with the same issue, read the answers there as well.
It's rare that you'd start to itemize before you have a house and the property tax and mortgage interest that brings. If your state has an income tax, that's first, but then you'll usually need far more in deductions to be over that standard deduction.
The other reason you might want to keep receipts is if you do any freelancing or contract work, for your business expenses. You can take a picture of the receipts with your phone, or scan them - you don't have to keep the paper copies.