Saving the Receipts: What to Keep and What to Toss
Most receipts you’re given by the cashier don’t need to be saved. However, not all of them are destined for the recycling bin just yet. Here are the receipts you absolutely should keep, and those you can comfortably throw away.
Save Receipts for Taxes
There are some expenses that you can write off in your taxes. As such, be sure to check what is and isn’t a possible deductible. Your new computer may count as a business expense. That money you donated to your local shelter could be a charitable write-off. If you’re unsure if it’ll count as a deduction, keep it anyways. You’ll need records to prove that it cost as much as you claim. However, typical groceries are unlikely to be write-offs, so you can toss those receipts away. With that said, some tax deductions vary from state to state, so always look up your local laws!
Assets make up your total “worth” as a tax-paying citizen. This can include your income, savings, personal cars, assessed property (like real estate), stocks, and much more. Any time you purchase an asset, hold on to the receipt! In particular, there are some assets that the IRS considers to depreciate in value with every year, which you can then write off in your total net worth.
This doesn’t apply for feeding and clothing your child, but rather for tax-deductible expenses meant to relieve the financial burden of a child, like childcare or helping pay for secondary education.
You’re allowed to receive tax deductions based on unreimbursed medical expenses. As of the beginning of 2019, you can start deducting these once they exceed 10% of your adjusted gross income. This only covers medically necessary expenses, however; not adjustments in diet or cosmetic surgery.
Keeping bank statements is especially important if you’re self-employed, or work a self-employed gig on the side. Bank statements can also be an alternative way to provide a receipt for expenses if you no longer have the physical receipt.
Tax Deductible Donations
There are some non-profits and other charitable entities that, when you donate to them, allow you to deduct that amount from your taxes. Most people don’t have the ability to donate this much, but, nonetheless, you can only use this deduction up to half of your total gross income.
Daily purchases typically will not be used or asked for when filing your taxes. This includes:
However, not all receipts are used for tax purposes! Depending on who you work for, if you’re on a business trip, you can be reimbursed for certain expenses. Make sure you look up what is and isn’t possible for reimbursement before you buy!