Saving Those Tax Receipts – Do I need To?

Many times people ask, “Do I need to save every single receipt?”

Taxes Sign Showing Tax Or Taxation

Generally speaking, if you make a good faith charitable donation, it is technically deductible. However, in the case of an IRS audit, you would not be able to support your position and your deduction would be disallowed.

So if you do make the donation, but just forget to get the receipt, you can track and claim it in most cases, just be prepared to lose the deduction if it gets questions.

Each situation is  unique though, so be sure to check with your tax advisor for more information.

Another thing to look into, is possibly buying a receipt scanner or maybe use a free app that can scan and save the receipts. Note, that unless you have a small business or have tons of receipts, this level of detail may not be needed.

When compiling all your tax information for the year, do not just throw it all in a folder and let the tax person try to find everything. It is often easier if both parties know exactly what is going on and what is expected. When the client fully grasps what they are doing and why, they often benefit even more with the use of a tax preparation expert.

Another tip when a person is close to itemizing each year is to structure your charitable deductions and other itemization, so that you load up on them in every other year to maximize the overall tax benefit. One example of this would be paying your January mortgage payment in December every other year.  Things of that nature.

Overall, if you keep generally good records and at least file everything in a somewhat organized fashion, tax time does not have to be a stressful time of year!

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