How Long Should You Keep Receipts?

Whether you're an individual tracking personal expenses or a small business owner preparing for tax season, the question of "how long to keep this" is constant. Keeping everything forever creates clutter; throwing things away too soon creates risk. Here is the definitive guide on receipt retention.

For Individuals (Personal Records)

For most personal purchases, the retention period depends on the purpose of the receipt:

• General Purchases: Keep until you've verified the transaction on your bank statement or the return period has passed (usually 30-90 days).
• Major Purchases (Electronics, Appliances): Keep for as long as you own the item to support warranty claims.
• Home Improvements: Keep for as long as you own the home (and 7 years after you sell) to help calculate capital gains tax.
• Medical Expenses: If you're claiming these for tax deductions, follow the 7-year rule.

For Small Business Owners & Freelancers

If you're using receipts for business tax deductions, the rules are stricter. While different regions have slightly different requirements, the general rule of thumb is 7 years.

This covers the period during which the tax authorities (like the IRS or SARS) can audit your records. This includes receipts for travel, equipment, office supplies, and meals.

The Digital Advantage

The good news is that most modern tax authorities accept digital scans of receipts, provided they are clear and legible. This means you can scan your paper receipts, verify the digital copy is clear, and then safely shred the original paper version (with a few rare exceptions like original deeds or contracts).