How Much Can You Spend Without Keeping Receipts for IRS

Let’s be honest—keeping every tiny receipt can be a real hassle. If you’ve ever wondered how much you can spend without keeping receipts for the IRS, you’re not alone. Whether you’re a freelancer, small business owner, or just someone trying to keep their finances in order, it’s important to understand what the IRS expects when it comes to documentation.

Do You Always Need a Receipt?

No, the IRS doesn’t require a paper receipt for every single business expense. But—and this is a big but—you must be able to prove that the expense actually happened and that it was for business purposes.

If you can’t prove your deduction during an audit, the IRS can deny the deduction, and that may cost you money in back taxes, penalties, and interest. So, while you might not legally need a receipt 100% of the time, it’s usually a smart move to keep them when you can.

What’s the Magic Number? $75!

Here’s the kicker: for business expenses under $75, the IRS doesn’t require you to keep a receipt. Yup, you read that right—< $75, no receipt necessary (though there are exceptions, more on that in a minute).

• Meals: Receipt not required if the expense is under $75, but you still need to note the who, what, when, and why.
• Taxi fare or ride-share: Under $75? No receipt needed.
• Office supplies or parking: Again, receipt not needed under $75, but still advisable to jot down notes.

Just remember, even without a receipt, you still need to keep some form of record, like:

• Bank or credit card statements
• Calendar entries
• Notes about the transaction (who, what, when, and why)

When the $75 Rule Doesn’t Apply

There are exceptions where the $75 rule goes out the window. For example:

• Lodging: Always requires a receipt, no matter the cost.
• Gifts: These may require more documentation, especially if part of a business expense.
• Entertainment: Post-2017, entertainment expenses aren’t deductible at all in most cases, so watch out!

If you’re ever unsure, it’s safest to save the receipt. Better safe than sorry, right?

Practical Tips for Busy People

Let’s face it, none of us want to keep a shoebox full of faded receipts. So, what can you do?

• Use a receipt tracking app — Take a photo and ditch the paper.
• Make notes right away — The longer you wait, the fuzzier the memory.
• Separate personal and business spending — It’ll save your sanity at tax time.

Real-Life Example

Imagine you’re at a coffee shop meeting a client. You grab two lattes for $9 and forget the receipt. No worries! It’s under $75. Just note the date, client’s name, and what you discussed. That info can be just as good as a receipt if the IRS ever asks.

Final Thoughts

So, how much can you spend without keeping receipts for the IRS? Up to $75 per transaction—but you should still keep a record. While you might not need every little piece of paper, having good records can protect you during an audit and keep your financial house in order.

Remember, staying organized isn’t just to please the IRS—it’s peace of mind for you and the health of your business. Got a system that works for you? Stick with it. And if not—maybe it’s time to start one today.