Receipts & Mileage Logs for Tax Season

Receipts and mileage logs are small records that pile up fast. Which expenses a business can deduct, what the IRS accepts as proof, and the mileage rates are all IRS rules, linked under Official sources below, and this guide does not restate them. What it covers is the habit: the documents worth keeping, how to store paper and digital copies, how receipt capture and trip tracking work in QuickBooks, and a weekly routine that keeps both current.

Moreno Financial Services keeps monthly books for small businesses across Central Texas through our bookkeeping services, starting at $600/mo. As our disclosures page puts it, bookkeeping accuracy depends on complete bank feeds, receipts, and timely responses from the owner, so the habits below are the part only the business can do.

The documents worth keeping

The IRS lists common supporting documents as sales slips, paid bills, invoices, receipts, deposit slips and canceled checks. What those documents need to show, and when one expense needs more than one of them, is on the IRS recordkeeping page linked below. For the routine, what matters is that each receipt is readable and easy to match to a bank or card line later.

Small cash payments leave the thinnest trail. For payments from a petty cash fund, the IRS guide to starting a business and keeping records suggests making out a petty cash slip and attaching it to the receipt.

Keeping paper in order

The IRS advice for paper is to keep supporting documents in an orderly fashion and in a safe place, for instance organized by year and by type of income or expense. A folder per month inside a folder per year works, with receipts sorted as they come in rather than in a single pile, and business receipts kept apart from household ones from the start. Whatever the system, the test is whether a given receipt can be found again when a bank line or a question points to it.

Digital copies

The IRS has rules for electronic storage systems, including records that are scanned or photographed, in its guide to starting a business and keeping records, linked below. The same guide covers when paper originals may be destroyed after scanning, so read that section before any paper goes in the bin.

The practical side is simpler to set up: a folder for each month's images, file names that show the date and the store, and a second copy somewhere other than the phone that took the photos, so a lost or broken phone does not take months of receipts with it.

Receipt capture in QuickBooks

In QuickBooks Online, Intuit's help articles describe several ways to get a receipt in: snap a photo in the QuickBooks mobile app, upload a file from a computer or Google Drive, or email the receipt in. QuickBooks accepts receipts as PDF, JPEG, JPG, GIF or PNG files, extracts the details into a transaction for you to review, and that transaction can then be added to an account or matched to one already in the books. Intuit notes the feature is limited on QuickBooks Online Free and QuickBooks Online Lite. In our monthly books, a person reviews what the software suggests.

Keeping a mileage log

How a car record is kept, what it has to show, and whether a particular log meets IRS requirements are covered in the IRS publication on travel, gift and car expenses, linked below. This guide stays with the tools.

QuickBooks mobile can track trips automatically from start to finish once automatic mileage tracking is set up. Each trip can be marked Business or Personal with a swipe and given a purpose, missed trips can be added by hand, and trips are reviewed after arrival. Intuit says only admin users can track mileage in QuickBooks Online, each user can view only their own mileage, and the feature is limited on the Free and Lite plans.

A weekly records routine

Once a week, a short pass keeps both habits current:

• Capture the week's paper receipts in the app, then file the paper by month
• Check that each captured image is readable, and retake any that are not
• Review the week's tracked trips and mark each one Business or Personal
• Add a purpose to each business trip, and add any trip the app missed
• Match captured receipts to the transactions already in the books

Where these records go next

Receipts and trip records feed the monthly books and, later, the return. How long to keep them is an IRS question, on the IRS page linked below, and our guide to storing tax records and getting copies covers keeping them safe and replacing a lost copy. If you would rather have someone keep the books from these records, book a free 15-minute call, and we will tell you honestly whether we can help.