IRS Receipt Requirements for Business Expenses: The $75 Rule and How Long to Keep Receipts

Last updated August 2026. Every rule on this page is cited to the Treasury regulation or IRS page it comes from. Nothing here is taken from a secondary summary, because the secondary summaries are where the $75 rule goes wrong.

What are the IRS receipt requirements for business expenses?

You must be able to substantiate every business expense you deduct, and for travel, meals, gifts, and listed property you generally need documentary evidence such as a receipt or paid bill when the expenditure is $75 or more. Lodging while traveling away from home requires documentary evidence at any amount. For ordinary operating expenses there is no dollar threshold at all: the record simply has to show what you paid, to whom, when, and for what.

The $75 rule, quoted from the regulation

Treasury Regulation 1.274-5(c)(2)(iii)(A) is short enough to read in full, and reading it clears up most of the confusion:

Except as provided in paragraph (c)(2)(iii)(B), documentary evidence, such as receipts, paid bills, or similar evidence sufficient to support an expenditure, is required for (1) Any expenditure for lodging while traveling away from home, and (2) Any other expenditure of $75 or more except, for transportation charges, documentary evidence will not be required if not readily available.

Two things follow that almost nobody states plainly. Lodging is called out by name, so a $58 motel room on a business trip still needs a receipt. And transportation charges get their own carve-out: if a receipt is not readily available, the regulation does not demand one even above $75, which is why a subway fare or a metered cab does not sink a deduction.

Which expenses the $75 rule does not cover

Section 1.274-5 sits under Internal Revenue Code section 274(d), which governs travel, entertainment, gifts, and listed property. It is not a general business-expense rule. Applying it to the rest of your spending is the single most common error in published guidance on this topic.

Read the fourth row twice. Nothing in the code says a $40 software subscription needs no record. It says the $75 substantiation regime does not reach it, and the ordinary rule that you must be able to prove your deduction still does. In practice that means the safe habit is the boring one: keep everything.

What a valid receipt has to show

The regulation defines adequacy directly. Documentary evidence is ordinarily considered adequate if it includes sufficient information to establish the amount, the date, the place, and the essential character of the expenditure. Four fields. If a document gives you all four, it works, and if it only gives you one it needs to be paired with something that supplies the rest, which is why a cancelled check alone will not carry a business expense.

For two common categories the regulation goes further and tells you exactly what a sufficient receipt looks like. A hotel receipt supports business travel when it shows the name, location, date, and separate amounts for charges such as lodging, meals, and telephone. A restaurant receipt supports a business meal when it shows the name and location of the restaurant, the date and amount, the number of people served, and, where a charge is made for something other than food and beverages, an indication that this is the case. That level of detail is on the itemized slip and missing from the credit card stub, which is the practical reason to keep the itemized one.

How long do you have to keep business receipts?

Three years from the date you file is the baseline, and several ordinary situations extend it well past that. The IRS publishes the periods directly, and they are worth keeping in front of you rather than guessing.

Records tied to property sit outside this table in practice. Keep the purchase invoice, improvement receipts, and disposal paperwork for an asset until the period of limitations expires for the year you dispose of it, because those documents support depreciation and the eventual gain or loss. For a piece of equipment bought in 2020 and sold in 2029, the 2020 receipt is still live evidence in 2032.

Does the IRS accept digital receipts?

Yes. IRS recordkeeping guidance is explicit that all requirements which apply to hard copy books and records apply equally to electronic records, and Revenue Procedure 97-22 set out the conditions for storing records electronically back in 1997. A scan or clear photograph is a valid record provided it is legible, complete, and retrievable when you need it. Once you have that, the paper is optional. For a fuller treatment of what makes a scan hold up, see our walkthrough on whether the IRS accepts digital and scanned receipts.

Legible and retrievable are doing real work in that sentence. A folder of 4,000 unnamed JPEGs technically stores your receipts and practically fails the test, because producing the one transaction an examiner asks about is not something you can do in a reasonable time. Reading each receipt into a row with a vendor, date, and amount is what turns storage into retrieval, which is the whole argument for extraction over a photo archive. Our receipt scanner for taxes page covers the deduction side of the same workflow.

What are the receipt rules for employee reimbursements?

If you reimburse employees, the receipt rules stop being a tax-return question and become a payroll question. Reimbursements are excluded from wages only when they run through an accountable plan, which under Regulation 1.62-2 requires three things: a business connection, substantiation of the expense to the payor, and the return of any amount paid in excess of substantiated expenses. Miss any one and the payments are treated as wages, reported on the W-2, and subject to withholding and employment tax.

The regulation supplies a fixed-date safe harbor that is easy to build a policy around. An advance made within 30 days of when an expense is paid or incurred, an expense substantiated to the payor within 60 days after it is paid or incurred, and an amount returned to the payor within 120 days after an expense is paid or incurred are all treated as occurring within a reasonable period of time. A policy that says receipts are due within 60 days and unused advances back within 120 is standing on the regulation rather than on habit, and our walkthrough of the accountable plan for expense reimbursement covers how to write one.

This is where receipt capture earns its keep in a company rather than a solo practice. Sixty days is not long, and chasing paper from a travelling sales team is how plans quietly fall out of compliance. If your team submits receipts as photos, running them through a receipt scanner for employees converts the submission into a dated, substantiated line item the same day it arrives.

Turning receipts into records you can actually produce

The gap between having receipts and having records is where most deductions get lost. ReceiptOCR reads each receipt and returns the vendor, location, date, payment method, line items, sales tax, and total as spreadsheet columns, which maps onto the amount, date, place, and character the regulation asks you to establish. Export one Excel or CSV file, keep it alongside the images, and the answer to any question about a single transaction is a filter rather than a search through a box. From there the same file imports into QuickBooks, opens in Excel, or goes to your accountant as is. If you are documenting deductions for a specific trade, the write-off lists on our small business tax deductions guide pair naturally with the record rules on this page.