IRS Receipt Requirements 2025: What You Need to Know

Tax season brings a familiar question for small business owners and freelancers: what receipts do I actually need to keep? The IRS has specific requirements for documenting business expenses, and understanding these rules can save you from headaches during an audit and help you claim every deduction you deserve.

This guide breaks down IRS receipt requirements in plain English. You will learn exactly what makes a receipt valid, when you need one, how long to keep your records, and what to do if you have lost a receipt. (And if you're wondering about the difference between receipts and invoices, check out our receipt vs invoice guide.)

The 5 Required Elements of a Valid Business Receipt

Not every piece of paper counts as a valid receipt in the eyes of the IRS. Your supporting documents need to include specific information to substantiate your business expenses. According to IRS guidelines, a proper receipt should contain these five elements:

1. Date of the transaction This proves when the expense occurred and establishes that it falls within the correct tax year. Without a date, the IRS cannot verify the timing of your deduction.

2. Amount paid The exact cost needs to be clearly visible. This should match your claimed deduction and any corresponding bank or credit card statements.

3. Vendor name Who did you pay? The business name or individual's name identifies where the money went and adds legitimacy to the purchase.

4. Description of goods or services This is crucial. The receipt must show what you actually bought. A vague credit card charge for "$50 at restaurant" does not demonstrate the expense was business-related.

5. Payment method Cash, credit card, check, or other payment type. This helps create a paper trail and allows the IRS to cross-reference with your bank records.

A handwritten note saying "lunch $50" will not cut it. Neither will a credit card receipt that only shows a total without describing what was purchased. The IRS wants to see itemized details that prove the expense was legitimate and business-related.

Example: IRS-Compliant Business Expense Receipt

Here's what a proper business expense receipt looks like with all five required elements:

OFFICE DEPOT #1247
5892 Commerce Blvd
Austin, TX 78701
(512) 555-0147

Date: 01/10/2025
Time: 2:45 PM
Transaction #: 847291

ITEMS PURCHASED:
HP Ink Cartridge (Black)    1 x $34.99    $34.99
HP Ink Cartridge (Color)    1 x $42.99    $42.99
Copy Paper (10 ream case)   1 x $54.99    $54.99
Sticky Notes (12-pack)      2 x $8.99     $17.98
File Folders (100-pack)     1 x $24.99    $24.99

Subtotal:                              $175.94
Sales Tax (8.25%):                      $14.51
Total:                                 $190.45

Payment: Visa ****3847
Auth Code: 847291

Thank you for shopping with us!

This receipt includes all five elements: date (01/10/2025), amount ($190.45), vendor (Office Depot), itemized description of goods, and payment method (Visa).

The IRS $75 Rule Explained

Here is some good news for small business owners: you do not need a receipt for every single business expense. The IRS has a threshold that makes expense tracking a bit easier.

What the $75 rule covers

According to IRS Publication 463, you do not need to keep a physical receipt for business expenses under $75. This applies to:

• Travel-related expenses like taxi fares, tolls, and transit passes
• Meals while traveling for business
• Out-of-pocket cash purchases for business supplies
• Small office expenses and incidentals

This $75 threshold was established in 1995, raised from the original $25 limit set back in 1962.

What the $75 rule does NOT cover

There are important exceptions where receipts are always required regardless of the amount:

Lodging expenses: Hotels, Airbnb rentals, and any overnight accommodations require receipts no matter what you spend. A $40 motel room still needs documentation.

Business gifts: The IRS requires full documentation for all business gifts, even small ones. Keep those receipts.

Listed property: Items like computers, phones, and vehicles that could be used for personal purposes need detailed records.

You still need documentation

Here is the catch: while you might not need a physical receipt for expenses under $75, you still need to document the expense. The IRS requires substantiation even for small purchases. This means recording:

• The amount spent
• The date
• The business purpose
• Who you were with (for meals)

Credit card statements, bank records, and detailed written logs can serve as alternative documentation for smaller expenses. But having the actual receipt is always the safest approach.

Receipt Requirements by Expense Type

Different types of business expenses have different documentation requirements. Here is what you need to know for the most common categories. For a complete breakdown of all Schedule C categories and what qualifies as deductible, see our guide to business expense categories.

Business meals

Meal deductions get extra scrutiny from the IRS. Beyond just keeping the receipt, you must document:

• The business purpose of the meal
• What business topics were discussed
• Who attended and their business relationship to you
• The date, location, and amount

A restaurant receipt showing itemized food and beverages is essential. Note the names of attendees and discussion topics directly on the receipt or in your expense tracking system.

Example: Business Meal Receipt with Required Documentation

THE CAPITAL GRILLE
500 Crescent Court
Dallas, TX 75201
(214) 555-0198

Date: 01/08/2025
Time: 12:30 PM
Server: Michael
Table: 24

GUEST CHECK:
Wedge Salad              1 x $16.00    $16.00
Caesar Salad             1 x $14.00    $14.00
Grilled Salmon           1 x $42.00    $42.00
Filet Mignon 8oz         1 x $58.00    $58.00
Sparkling Water          2 x $6.00     $12.00
Iced Tea                 2 x $4.00      $8.00

Subtotal:                             $150.00
Tax (8.25%):                           $12.38
Total:                                $162.38

Tip: $32.00
Grand Total: $194.38

Payment: Amex ****1002

--------------------------------------
BUSINESS PURPOSE NOTES:
Client: Sarah Chen, ABC Marketing
Topics: Q1 campaign strategy,
        contract renewal discussion
--------------------------------------

Travel and transportation

For travel expenses, keep receipts for:

• Airfare and train tickets
• Rental cars and fuel
• Parking fees (though small amounts can be logged without receipts)
• Tolls (can use a written log for small amounts)
• Ride-sharing services like Uber or Lyft

Transportation costs without receipts, such as parking meters, can be documented in a written log showing the date, amount, and business purpose.

Lodging (always requires receipts)

This is non-negotiable. Hotel expenses require detailed documentation regardless of cost. Keep:

• Hotel folios showing dates, room rate, and taxes
• Booking confirmations
• Receipts for any additional charges

Your hotel receipt should clearly show the dates of stay, daily room rate, applicable taxes, and the business location you were visiting.

Example: Hotel Receipt for Business Travel

MARRIOTT DOWNTOWN
200 East 4th Street
Austin, TX 78701
(512) 555-0234

GUEST FOLIO

Guest: John Smith
Company: Smith Consulting LLC
Confirmation: MR847291X
Check-in: 01/15/2025 3:00 PM
Check-out: 01/17/2025 11:00 AM

ROOM CHARGES:
01/15 King Room          1 night    $189.00
01/16 King Room          1 night    $189.00

Room Subtotal:                      $378.00
State Tax (6%):                      $22.68
City Tax (9%):                       $34.02
Occupancy Fee:                        $6.00

ADDITIONAL CHARGES:
01/15 Parking                        $28.00
01/16 Parking                        $28.00

Total Charges:                      $496.70

Payment: Visa ****7234
Auth: 928471

Purpose of Stay: Tech Conference 2025
Business Location: Austin Convention Ctr

Office supplies and equipment

Keep receipts for:

• Computer equipment and software
• Office furniture
• Supplies like paper, ink, and stationery
• Tools and equipment for your trade

For larger purchases, especially those over $2,500, detailed receipts become even more important for depreciation calculations.

Mileage

Good news for those tracking vehicle expenses: no receipts are required for mileage reimbursement when using the standard mileage rate. However, you must maintain a detailed mileage log that includes:

• Date of each trip
• Starting and ending locations
• Business purpose of the trip
• Total miles driven

The 2025 IRS standard mileage rate is 70 cents per mile for business use. If you choose to deduct actual vehicle expenses instead, you will need receipts for gas, maintenance, repairs, and insurance. Commercial truckers operating across state lines have additional fuel receipt requirements under IFTA — see our guide to IFTA fuel receipt requirements for the specific documentation needed.

Digital Receipts: What the IRS Accepts

The IRS fully accepts digital receipts as valid documentation. In fact, they encourage electronic storage. This means:

Acceptable formats include:

• Photos of paper receipts taken with your phone
• Scanned copies of receipts
• Email receipts from vendors
• PDF receipts downloaded from online purchases
• Screenshots of digital transactions

Requirements for digital receipts:

• Must be legible and complete
• Should display all necessary details (date, amount, vendor, description)
• Need to be accessible if the IRS requests them
• Should be stored in a reliable, organized system

Pro tip: Paper receipts fade over time, especially thermal paper receipts. Scan or photograph important receipts soon after receiving them to preserve the information.

How Long to Keep Receipts

The IRS has clear guidelines on record retention, and they vary based on your situation.

3-year rule (standard)

Keep all receipts and supporting documents for at least three years after filing the tax return that includes the expense. This is the minimum retention period for most business records.

6-year rule (underreported income)

If you underreported your gross income by more than 25%, the IRS can go back six years. Keep records for six years if there is any chance your income reporting might be questioned.

7-year rule (bad debt or worthless securities)

Claim a deduction for bad debt or worthless securities? Keep those records for seven years.

Indefinite (fraud or non-filing)

If you filed a fraudulent return or did not file at all, the IRS has no time limit. Records should be kept indefinitely in these situations.

Practical recommendation: Keep business receipts and tax records for at least seven years to cover most scenarios. Storage is cheap, and having documentation when you need it is invaluable. For a full retention timeline by receipt type, see our how long to keep receipts guide.

Lost a receipt you needed to keep? Check out our guide on what to do when you lose a receipt for IRS rules and practical solutions.

Creating IRS-Compliant Receipts

If you run a business and provide receipts to customers, making sure those receipts meet IRS standards benefits everyone. A proper receipt helps your customers document their expenses and demonstrates your professionalism.

Essential elements checklist

Every receipt you create should include:

• Your business name and contact information
• Date and time of the transaction
• Itemized list of products or services
• Individual prices and quantities
• Subtotal before tax
• Tax amount (shown separately)
• Grand total
• Payment method used
• Transaction or receipt number

How MakeMyReceipt helps

Creating receipts that include all required fields does not have to be complicated. Our expense receipt template and itemized receipt template include all the standard fields the IRS looks for:

• Clear business identification
• Date and time stamps
• Itemized line items with descriptions
• Automatic tax calculations
• Multiple payment method options
• Professional formatting

Browse our complete template library to find receipt formats designed for your specific industry. Each template is built with proper documentation in mind.

Need help creating a detailed receipt? Learn how to create an itemized receipt with our step-by-step guide.

What If You Do Not Have Receipts?

Lost a receipt? You are not necessarily out of luck. The IRS has provisions for situations where documentation has been lost or destroyed.

The Cohan Rule

The Cohan Rule comes from a 1930 court case involving Broadway performer George M. Cohan. He deducted substantial business expenses without detailed records, and the court ruled that some deductions could be reasonably estimated, as long as the expenses were clearly legitimate.

Under this rule, you can claim business expense deductions based on reasonable estimates, provided:

• There is evidence the expense actually occurred
• You can provide some factual basis for your estimate
• The estimate is reasonable, not arbitrary

However, the IRS will likely allow only a minimum standard amount rather than your full claimed expense.

Alternative documentation

When receipts are missing, gather whatever supporting evidence you can:

• Credit card and bank statements
• Calendar entries showing business meetings
• Email confirmations
• Signed contracts or agreements
• Photos (for example, of a business event)
• Testimonies from other attendees
• Written logs made at the time of the expense

Important limitations

The Cohan Rule does not apply to certain expense categories. You cannot estimate deductions for:

• Travel and entertainment expenses (covered under IRC Section 274)
• Business meals
• Business gifts
• Charitable contributions
• Listed property like vehicles and computers

For these categories, detailed documentation is strictly required. No receipt, no deduction.

Best practice

Do not rely on the Cohan Rule as a backup plan. The IRS prefers concrete proof over estimated deductions. Maintain comprehensive records for all business expenses from the start. When in doubt, keep the receipt.

Receipts for Tax Deductions: Quick Reference

Here is a summary of what documentation you need for common tax deductions:

Take Control of Your Business Documentation

Understanding IRS receipt requirements does not have to be overwhelming. The key points to remember:

1. Include all five elements on every receipt: date, amount, vendor, description, and payment method
2. Keep receipts for expenses over $75, but document all business expenses regardless of amount
3. Lodging always requires receipts, no exceptions for the $75 rule
4. Digital receipts are fully accepted by the IRS
5. Retain records for at least three years, but seven years is safer
6. Create IRS-compliant receipts for your own business transactions

Proper documentation protects you during audits and ensures you can claim every deduction you deserve. Start organizing your receipts today, and make it a habit to capture documentation at the point of purchase.

Need to create professional receipts that meet IRS standards? Start with our free receipt maker and choose from 50+ templates designed with all the required fields built in. If you accept cash payments, see our guide on how to create a receipt for cash transactions for specific documentation requirements.