Updated
What does a receipt need to show for the IRS?
Four things: the amount, date, place and essential character of the expense. IRS Publication 463 says documentary evidence "will ordinarily be considered adequate" if it shows those. For two common expenses, it spells out more detail.
A hotel receipt is enough to support business lodging if it shows:
- the name and location of the hotel
- the dates you stayed
- separate amounts for charges such as lodging, meals and telephone calls
A restaurant receipt is enough to support a business meal if it shows:
- the name and location of the restaurant
- the number of people served
- the date and amount of the expense
If the bill includes anything other than food and beverages, Publication 463 says the receipt must show that too.
For business expenses outside Publication 463's scope, such as supplies, software or contractor bills, IRS Publication 583 gives the general rule: your supporting documents "should show the amount paid and that the amount was for a business expense."
Do I need a receipt for expenses under $75?
Usually not, for travel, meals, gifts and transportation, as long as it isn't lodging. Publication 463 says documentary evidence "isn't needed" if:
- "Your expense, other than lodging, is less than $75," or
- you have "a transportation expense for which a receipt isn't readily available."
(A third case covers employees on an accountable-plan per diem.)
Three cautions:
- If you're self-employed, lodging needs documentary evidence whatever it costs, even a $60 motel night; the $75 exception doesn't cover it.
- No receipt doesn't mean no record. You still have to show the amount, date, place and business purpose, in a log, calendar note or expense record.
- The exception is written in Publication 463. Publication 583, which covers business records generally, doesn't repeat it, so for other purchases keep supporting documents and ask your CPA how they treat small items.
Is a canceled check or card statement enough?
Not by itself. Publication 463 says a canceled check together with a bill from the payee "ordinarily establishes the cost," but a canceled check alone "doesn't prove a business expense without other evidence to show that it was for a business purpose." Publication 583 accepts some bank and card statements as proof of payment, then warns that proof of payment "by itself, does not establish you are entitled to a tax deduction." The details are in bank statements instead of receipts.
Do I have to write down the business purpose?
Generally yes. Publication 463 says you "must generally provide a written statement of the business purpose of an expense," though "the degree of proof varies," and if the purpose is "clear from the surrounding circumstances," no written explanation is needed. One line is usually enough: "Dinner with K. Lee, Ridgeview Dental, proposal for 2027 site redesign." You don't need to repeat details the receipt already shows.
How soon do I need to record an expense?
At or near the time, though not necessarily the same day. Publication 463 says to record expenses "at or near the time" and support them with documentary evidence. It adds that "if you maintain a log on a weekly basis that accounts for use during the week, the log is considered a timely kept record." The publication says a timely record "has more value than a statement prepared later," when memories have faded.
What do I need for each type of expense?
| Expense | Documentary evidence needed? | Record these details |
|---|---|---|
| Lodging, any amount | Yes: hotel receipt with name, location, dates and separate charges | Destination, dates, business purpose |
| Restaurant meal, $75 or more | Yes: receipt with restaurant name and location, number of people served, date and amount | Business purpose; who attended |
| Meal under $75 | Not required | Amount, date, place, business purpose |
| Airfare, $75 or more | Yes: the airline's receipt showing the fare | Trip dates, destination, purpose |
| Taxi or rideshare | Not required if under $75 or if a receipt isn't readily available | Amount, date, route, purpose |
| Business gift, $75 or more | Yes | Cost, date and description of the gift, and who received it (the deduction is generally limited to $25 per person per year) |
| Car use | Receipts for car costs you deduct at actual cost | Mileage for each business use, date, destination, purpose, total miles for the year |
| Supplies, software, contractors | Supporting documents (Publication 583) | What it was and why it was for the business |
Example: a consultant's month of receipts
A freelance consultant reviews one month. All numbers are fictional.
- Hotel, 1 night, $96. A receipt is needed even though the bill is small: it's lodging. The consultant keeps the emailed folio.
- Solo lunch on a client trip, $28. Under $75, so no receipt is required. The consultant logs the amount, date, city and trip.
- Client dinner, $184. The itemized receipt shows the restaurant, 3 people served, the date and the amount. The consultant adds the guests' names and what was discussed.
- Rideshares, $23 and $31. Both under $75. The app emails receipts anyway, so the consultant keeps them.
- Conference booth materials, $310. This is a general business expense, so the consultant keeps the invoice under Publication 583's rule.
Whether each item is deductible, and how much, is for the consultant and their CPA to settle. Meals, for example, are generally 50%.
Where Amy fits
Most of what a receipt has to show is already in your records, scattered across statements, email and your calendar. Amy brings it together from what you already have, tells you what's still missing and asks for the detail only you know. You and your CPA decide what's enough.
