Do I Need a Receipt to Write Off Business Expenses?

“Do I actually need the receipt to write off the expense?” We hear this question a lot, and the answer is surprisingly complex - which is why we always recommend capturing receipts in the Outpave app as soon after the transaction as possible. That being said, here are the guidelines given by the IRS regarding expense write-offs.

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Documentation is Always required

​While the IRS doesn’t require a receipt for every expense, it does set guidelines about which expenses are eligible for write-offs. If you plan to claim an expense, you’ll need to be able to prove specific details.

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• The expense is an ordinary (common) business expense.
• The expense was necessary or helpful for the business.
• The expense can be substantiated.

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If you don’t have the receipt, you can sometimes use other approved documents (i.e., bank statements, canceled checks, or vendor invoices) for small expenses (less than $75).

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Some Expense Always Require a Receipt

​There are certain categories of spending for which the IRS will always require proof of purchase receipts. These categories include:

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• Travel expenses (airfare, hotels, rental cars)
• Meals (must include business purpose and attendees)
• Vehicle expenses (mileage logs or actual expense records)
• Any expense of $75 or more

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Alternative documents or these purchases will not be accepted by the IRS, and your claim will likely be denied.

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It is Better to Be Safe than Sorry

​Even though you can technically write off certain small expenses that happen frequently in the field without a receipt, it is better to be safe than sorry. Receipts provide the clearest, most accurate paper trail for expenses, making a potential audit less problematic.  

If the IRS disallows deductions during an audit, consequences may include:

• Back taxes owed
• Penalties and interest
• Increased audit scrutiny in future years

Saving Receipts is Easy with Outpave

The good news is that Outpave makes saving, organizing, and tracking receipts easier than ever.  No more overflowing file cabinets or piles of paper to sort through at the end of each year (or month).  With the Outpave app, you can upload the receipt within seconds.

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• Take a picture of the receipt directly from the app.
• Allocate the expense category with one click.
• The system automatically assigns the expense to a budget or project.
• Admin can easily track budgets and spending.
• Easily follow the paper trail for expenses during an IRS audit.

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Get Started Today

Take the next step towards streamlined finance management—request your product demo today. Unlock new efficiencies for your business and stay connected with us on social media for expert tips and updates.

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