Depending on your situation, you could have hundreds of documents and receipts to manage for tax purposes. The IRS says you can use any record-keeping system you choose, as long as your income and expenses are clear, accurate, and include all necessary details.
Here are some basic ideas to help you keep your records straight, so they’re easy to locate if the IRS needs them.
Key takeaways for organizing records for taxes
- Digitize your receipts by taking photos or using a receipt tracking app so you always have a clear, searchable record.
- Organize your documents into simple categories, such as business expenses, medical bills, donations, and income forms.
- Check on your finances monthly to review transactions, match receipts, and keep everything up to date.
- Keep only the records you need based on IRS guidelines (generally 3–7 years), so your files stay uncluttered.
- Save receipts that document your income and expenses, including business, medical, charitable, and major purchases, to support potential tax deductions.
Organize documents right away by category
It’s easy to lose a piece of paper – especially when you have lots of other loose documents floating around. Using file folders is an age-old method to stay organized, and it’s extremely effective. Pick up several folders from an office supply store and label them each by category. Then, when you get a bill, a receipt, or an official tax document, make it a habit to put it in its place immediately.
Label folders with the following categories. It’s possible you’ll have fewer categories or different labels, but this is a good start:
- Income (like a W-2 or 1099)
- Banking info (mortgage, student loans, investments, retirement savings, etc.)
If you have self-employed income from a side gig or small business, you’ll also have categories like:
- Business income
- Business expenses (this might even be broken into smaller categories like office supplies, utilities, or advertising)
Tip: If you’re new to entrepreneurship, there are several tax deductions for new businesses you should consider at tax time like start-up expenses and organizational costs.
Scan or photograph your receipts and keep digital copies
If you tend to lose papers, here is some good news: the IRS will accept scanned and/or digital receipts for tax purposes. That means you can snap photos of your loose receipts with your smartphone. Keeping digital versions also gives you a reliable backup if your paper receipts get misplaced, faded, or damaged over time.
Be sure to get a clear picture of the entire receipt and that you can see the date, address of the business, and total purchase amount. Alternatively, you can purchase a receipt scanner (available at any office supply store) and save the digital copies on your computer.
Your digital files still need to be orderly in case the IRS has a question, so use a receipt tracking app to organize and save your images. There are several receipt tracking apps to choose from. Find one that works for you and stick with it.
Tip: Filing your taxes electronically also saves you time! Plus, it’s the IRS’s preferred filing method.
Write notes on your receipts
If you are reporting 1099 income and deducting job-related expenses, your receipts will need to include the amount, location, date, and type of expense. Let’s say you met a potential vendor over a business lunch. To write off a meal expense, your receipt will need to show the name of the restaurant, the location, the date, who attended the meeting, the total paid, and a note to indicate it was a business lunch to discuss vendor opportunities.
Make it a habit to note any important details directly on the receipt, then put the receipt where it belongs right away, so you don’t miss any expenses when you file your taxes.
Use our tax prep checklist to gather your records
Everyone’s tax situation is unique, so the exact records you’ll need to have on hand will depend on things like your job, your family, where you live, and how you spend your income. This tax prep checklist should give you a good idea of the documents you’ll need, including personal information (like Social Security numbers for yourself and any dependents), income statements (such as W‑2s, 1099s, unemployment records, or investment income forms), receipts for deductible expenses, records of major life changes, and documents related to credits you may qualify for.
How long should I keep tax records and receipts?
As a general rule of thumb, you should hang on to your individual federal tax records for three years after you file. This allows time to amend your return if needed, since you typically have up to three years to claim refunds or credits. The IRS can also audit your return within this timeframe (and up to six years in some cases), so you’ll need records to support what you filed. Before discarding anything, keep in mind that some lenders or insurance providers may require records for a longer period.
If you didn’t file a return, keep those records indefinitely. And if you claimed a bad debt or worthless securities loss, hold onto your documents for seven years. The IRS outlines the unique scenarios where you might need to hold onto your records for longer periods of time.
How long should I keep tax returns?
Generally, you should keep your old tax returns and records for at least three years after you file them. This is important because you have up to three years to update your return if you find a mistake or want to claim a refund and it’s also the amount of time the IRS usually has to review or audit your return. However, in some cases, the IRS can go back up to six years, if fraud is suspected.
What to do if you lost tax documents
The answer to this question is entirely dependent on the type of document you’ve lost. Below, you’ll find tips to get a copy of some of the most commonly used tax documents.
- W-2: If you lost your W-2, reach out to your employer’s HR or payroll department. If you can’t get a copy from your employer, reach out to the IRS to request a wage transcript or copy of the W-2.
- Form 1099 for Interest and Dividend Income: Look at your year-end bank statement or log in to your investment account.
- 1099-MISC and 1099-NEC: If you’re a freelancer needing a copy of a 1099-NEC, contact the payer and they’ll provide you with a copy. If you’re missing a 1099-MISC, you have a few options. Review information on how to file and retrieve a lost 1090-MISC.
- Receipts for donations: If your cash or non-cash donation was less than $250, a copy of your bank statement should be enough documentation for the IRS. If your contribution was worth more than $250, you need to get a note from the person or organization that you made the donation to.
- Prior-year returns: If you can’t find your prior-year returns, check with your tax preparer or the tax prep software you used in the past. TaxSlayer makes it easy to access prior-year returns after you’ve filed. If you haven’t filed with us before, you can upload prior-year returns, making filing quick and easy.
If you’re having trouble getting a hold of multiple documents needed to file taxes, you might need to file a tax extension. By filing a tax extension, you can request more time to submit your tax return. While this extension does not give you additional time to pay a tax bill, it can give you the extra time you need to gather your paperwork.
Frequently asked questions about organizing receipts for taxes
What’s the best way to store my tax records?
One way to keep your documents safe and protect your privacy is with a fireproof safe. It might sound old-fashioned in a high-tech world, but it’s effective. You can also store digital copies of documents on an external hard drive or backed up on the cloud.
What is the best way to destroy old tax records?
Once you can confidently get rid of your records, be sure to use a safe method, such as shredding, to ensure confidential information is secure. If you have a digital copy of your records, delete all versions – including the files that are backed up on your hard drive.
Can you use a bank or credit card statement as a receipt for your taxes?
No. A bank statement doesn’t show all the itemized details that the IRS requires. The IRS accepts receipts, canceled checks, and copies of bills to verify expenses.
What’s the best way to keep records when you’re self-employed?
When you’re self-employed, keeping organized records means managing your finances and preparing for tax season. Utilize accounting software to track income and expenses in real-time, ensuring all transactions are documented. Additionally, consider establishing a consistent schedule for reviewing your records each month, and always keep digital backups of important documents to safeguard against loss.
