Once receipts are scanned and their data is extracted into a spreadsheet or accounting app, the paper starts to look pointless. Most people then ask two things: can I throw the originals away, and how long do I have to keep the digital copies?
This is a plain-language summary of the US federal rules for small businesses and self-employed people, with links to the IRS sources. It isn't tax advice. State rules and your own situation can change the answer, so check anything you plan to act on with your accountant. The figures were checked against the IRS pages and the regulation text on 28 October 2026.
Scans and photos count as records
The IRS accepts electronic copies of paper records. The rules for that are in Revenue Procedure 97-22. In short, an electronic storage system has to:
- Transfer the paper record accurately and completely, so the copy shows everything the original showed.
- Produce copies that are legible and readable when someone needs to look at them.
- Index the records so a specific one can be found and retrieved.
- Keep the records intact and protected from being altered.
- Be able to reproduce a record on paper if asked.
For a small business, that mostly means: a clear, complete image of each receipt; files stored somewhere backed up; and a way to find the receipt behind any line in your books. A blurry photo with the total cut off doesn't meet the first two points, even if the number was typed in correctly.
Once your system meets these requirements, Rev. Proc. 97-22 (section 7) allows you to destroy the paper originals. Before you shred anything, ask your accountant whether your setup meets them, especially for high-value or unusual purchases.
What a receipt needs to show
The IRS asks for supporting documents that show the amount paid and that the payment was for a business expense. Publication 583 lists the usual ones: receipts, canceled checks, account statements, credit card slips and invoices.
For travel, gifts and car expenses, Publication 463 is stricter. Documentary evidence like a receipt is generally needed for:
- Any lodging expense, whatever the amount.
- Any other expense of $75 or more.
Evidence that shows the amount, date, place and essential character of the expense is ordinarily enough. The business purpose is often not on the receipt at all, so record it yourself, in a note field or a log, when you file the receipt. "Lunch, $46" on its own doesn't say who you met or why.
There is one exception in the regulation, 26 CFR 1.274-5: for transportation charges, documentary evidence isn't required when it isn't readily available, which covers some taxi and transit fares.
Expenses under the threshold still need a record. Publication 463 accepts a log with the same details for those.
A card or bank statement shows the amount, date and payee, but usually not what you bought, so on its own it may not show the essential character of the expense. Keep the receipt as well as the statement.
How long to keep receipts
The IRS page on how long to keep records ties the period to how long the IRS can assess tax for that year:
| Situation | Keep records for |
|---|---|
| Most returns | 3 years |
| You file a claim for credit or refund after filing | 3 years from filing, or 2 years from paying the tax, whichever is later |
| You left out income worth more than 25% of the gross income on the return | 6 years |
| You claim a loss from worthless securities or a bad debt deduction | 7 years |
| Employment tax records | At least 4 years after the tax is due or paid, whichever is later |
| You didn't file a return, or filed a fraudulent one | Indefinitely |
Receipts for property you own, such as equipment or a vehicle, are kept until the period expires for the year you sell or dispose of it, because they support the cost basis.
A simple policy is to keep everything for seven years, so nobody has to sort documents by rule. Digital storage makes that cheap. Lenders, insurers and state agencies may also ask for records longer than the IRS does.
Extracted data is a summary, not the record
This is where automation can trip people up. When a tool reads a receipt and returns the merchant, date, tax and total, that data is very useful. It feeds your books, your dashboard and your tax return. It is still a copy of a few facts from the document, possibly with a reading error, and it leaves out what the extractor didn't capture.
The receipt or invoice is the supporting document. So:
- Keep the original file (or a complete scan) for the full retention period.
- Store a link to the file with every extracted row, so anyone can go from a number in the books to the document behind it.
- Don't overwrite or edit the image. Corrections go in the data, with the original left as it was.
- Back up both.
If you extract data with DocuParse API (the receipt OCR API page shows the fields it reads), the result includes a document_id you can keep next to your own file reference. The spend dashboard tutorial stores the Drive link to the original in every row for the same reason.
A setup that holds up
- Capture receipts on the day: photograph paper ones flat, in good light, with all four edges visible.
- Forward email receipts and PDF invoices to one inbox or folder.
- Name or tag files consistently, for example
2026-10-14_shell_34.17.jpg, or let your system index them. - Add the business purpose when you capture the receipt, not at tax time.
- Run the extracted data through basic checks, so a misread total doesn't reach your return. Six checks for bad extractions covers them.
- Keep everything at least as long as the table above says, and reconcile against bank statements monthly.
Thermal paper fades, which is one more reason to scan receipts early. A receipt that's unreadable after a year in a drawer won't help anyone.
This post is part of the receipt and invoice data entry guide. To have receipts read for you, Sign up free for 20 documents a month, or try one in the demo.