Paper receipts

The IRS still expects paper receipts as evidence to prove deductions. So it’s important to get in the ongoing habit of saving receipts, invoices, planner notes and mileage diaries -- and filing them systematically. You want to be sure you’ll have (and be able to find) the documentation that might be asked for some day, even years in the future.

Every year, more and more records and transactions of all sorts that used to be done on paper are now handled electronically. But at this point, the IRS rules for documentation have not officially changed to say we can forget about saving all those paper receipts.

To be on the safe side, continue saving paper records as you have been. But ask your accountant to be sure to let you know if the requirements for paper documentation change and how the new rules then play out in the first tested situations.

Meanwhile, for those online transactions that you never received or issued paper on, it’s probably a good idea to print out and file the PDFs or email that described what money changed hands and why.

Or, if you don’t want to print out all that and keep the paper, be SURE to keep all your electronic receipts together, organized in logical directories that will still make sense to you in seven years. Keep them easy to find on a permanent removable backup disc. Don’t just keep this on your computer -- copy it onto a CD, DVD, ZIP or other device that you can keep permanently in a safe place -- preferably in another building away from your office. If a disaster strikes one location, your backup stored elsewhere is still safe.

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