How Long You Should Keep Receipts For?

Generally speaking, there are only a couple of types of receipts that you need to hold on to for a long time.  Most of the time, you only need to keep receipts until you know that the product you purchased is not defective and that there is very little chance that you’re going to bring it back for a refund or store credit. 

 

Some receipts, however, do need to be held onto for quite a while.  Here are the most notable ones:

Tax Receipts

If you’re claiming an income tax deduction for a purchase, you need to make sure that you hold onto the receipts for at least three years.  The IRS can audit you up to three years after you submit your taxes.  Most businesses hold onto their receipts for a bit longer than this, however.  The receipts that relate specifically to your taxes are oftentimes also useful for projecting expenses and for other projects related to your home business.

Utilities and Household Expenses

If none of these receipts represent tax deductions to you, you only need to hold onto these for about a year.  Technically speaking, utility receipts can be thrown away as soon as you pay the bill.  When you pay the bill on a month’s worth of utilities, the transaction is a done deal.  Most people, however, do hang onto them for a while.  The one reason you may want to keep these receipts is to compare expenses, such as your energy consumption costs from one year to the next.

Large Purchases

Large purchases generally necessitate that you should keep receipts around for a while.  If you have a warranty on the item, hold onto any receipts that came along with it to prove where you purchased it and how much you paid.  Some warranties will actually require that you present the receipt, even if you bring the item in on the last day of warranty coverage.

Small Purchases

You don’t really need to keep the receipts for small items, such as a T-shirt, some CDs or other items.  Once you know that you got what you paid for and you’re happy with the item, the receipt is really just a piece of scrap paper. 

 

Some people hang onto their grocery store receipts to track their expenses.  If you’re not tracking your expenses, you can just go ahead and throw them away once you’re sure you weren’t overcharged on anything and once all the groceries are gone.

If you’re storing receipts for the long-term, such as for your tax deductions, make sure you keep them somewhere where you won’t lose them.  Even though it might seem a little bit outdated, tossing them all in a shoebox throughout the year is still a very good procedure, or even into a filing cabinet. 

 

You don’t necessarily have to have them all in order and, as long as you wrote on the amount of the purchase and what it was for in your ledgers, you don’t have to pull out the receipt unless you’re audited.  Be sure you keep the shoebox around, however, because the IRS might want to take a look at those receipts at some point.

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