What Business Expenses You Can Claim?

1. Membership Fees

You can claim membership fees or union dues, which you can find on an income statement. In such cases, you don’t need a receipt as you can show the details in written form.

2. Stationary or Computer Items

You can easily claim stationary costs without a receipt if you have proof on a credit or debit card statement. For this, you need to make a note next to the relevant items on the statement. You can also click and take a photo of the statement and the item purchased as evidence.

3. Travel Expenses

An employee can easily claim travel expenditure when they travel for any office-related work. Keep a note of kilometers traveled in your logbook if you are using your private vehicle.

The minimum duration of maintaining the logbook is 12 consecutive weeks to use as evidence. Per kilometer, you can claim 85 cents as per the ATO allowance. The maximum is 5,000 km per financial year.

4. Working from Home

Work-from-home employees can save on petrol expenses, but the utility bill will be high.

You can claim for home office expenses through the following deductions:

• Insurance
• Mortgage interest
• Utilities
• Depreciation
• Repairing

The ATO offers the rate-per-hour method. Professionals can easily claim 52 cents per hour for every hour spent on home office expenses. All expenses like electricity, internet, and equipment will be covered by this.

5. Insurance

Professionals can avail of deductions in business insurance (workers’ compensation, malpractice, and liability).

6. Marketing and Promotion

All expenditures related to your business promotion can be deducted. This includes public relations, advertisements, and other promotional materials.

7. Contribution to Charity

It will be your personal income tax return when you contribute to charity through your business. You must maintain a proper record in the form of written confirmation or a bank account statement.

The mileage deduction claim in charity is $0.14 per mile driven. You need to log how much you drove your vehicle for the charity purpose.

8. Self-Employment Taxes

Self-employment taxes apply to those professionals who run their businesses. This covers the contribution of both employee and employer. 15.3% is the total tax on gross income.

You can deduct the employer’s share of this tax, which amounts to 50% of the total gross income. Here, instead of a receipt, you can list it in Part II of the Schedule 1 form.

9. Health Insurance Premiums

Health insurance premiums are also useful for tax deductions. However, you must have personal health insurance instead of a health plan from your employer.

In such a case, you can download the payment history of the records from your health insurance portal and utilize them in place of receipts.

How to Record Expenses Without Receipts?

The core aim is to claim deductions without the IRS auditor’s involvement. Many business expenses require receipts, but what about without receipts? You can lower the taxable income without receipt through the listed alternative methods:

1. Using Bank and Credit Card Statements

The statement of bank and credit card are the optimal receipt alternatives to claim business expenses. You must download the credit card or bank statement regularly and highlight business expenses.

2. Using Digital Tools and Applications

Many software and applications simplify expense tracking. Tools like Moon Invoice offer the best solution to manage expenses and taxation. It helps you to keep a proper record and claim tax deductions without receipts.

3. IRS Compliance

IRS is open to accepting other forms of documentation along with the receipts for documenting deductions. Always provide detailed information that helps to express the required details well.

4. Relevant Contracts

Several documents are used for business practices that cover some information about transactions. These documents include emails, contracts, written documents, and agreements. However, you must maintain separate documents and keep a well-organized record of such documents.

5. Obtaining Duplicate Receipts

It is good practice to obtain duplicate receipts. Many business professionals can easily provide electronic copies of the original receipts. You can contact the vendor to receive a duplicate receipt. A duplicate copy is useful to fill the need for missing receipts for business expenses.

6. Maintaining Detailed Log

A properly filled log is a good alternative to a receipt for recording expenses. However, you must regularly update this log with the latest information (date, purpose, amount, and party). You can use spreadsheets to manage a log.

7. Take a Screenshot or a Picture

Wherever possible, capture a picture or screenshot of the transaction to use as evidence when a physical receipt is unavailable. Try to cover as much information as you can that supports your evidence.

How Much Can I Claim Without Receipts?

You can claim up to $300 for all work-related items purchased. It is also possible to claim more, but it needs proper evidence. So, you must have a receipt to claim more.

Different countries have different guidelines about the number of claims without receipts. It also varies according to the type of expense. Generally, tax authorities also need proper documentation for all business expenses. There can be certain exceptions or allowances for small expenses.

Does the IRS Require Receipts for Business Expenses?

According to the IRS, receipts are not necessary for all businesses. Still, using receipts to claim tax deductions is a good approach. Other than receipts, bank statements, invoices, and other relevant documents can be the best evidence of expenses.

Business Expenses for VAT-Registered Businesses

A valid VAT receipt is required when the business is VAT-registered, and there is a requirement for reclaiming VAT on an expense. Also, you must understand and be aware of the VAT rules to claim the expenses.

The following types of business expenses can be claimed by VAT-registered businesses:

• Travel expenses
• Accommodation expenses during a business trip
• Utilities
• Advertising campaigns
• Fees for legal services
• Accounting fees
• Employee-related expenses like wages

To claim expenses successfully, a business must focus on the listed points:

• Merging business and personal expenses can complicate tax audits. Keep your business separate from your personal expenditures. Professionals can simply review bank statements and proceed with tax audits and claims.
• Invoices, bank statements, and receipts are evidence supporting documents for business expenses. So it is crucial to maintain organized records of these documents.
• Consult with tax professionals and ensure that it complies with tax regulations.

What Is the Way to Track Business Expenses Without Physical Receipts?

You can simplify the expense tracking process through digital tools like Moon Invoice. It eases the expense management through the following ways:

Expense Creation

Professionals can easily create expenses using Moon Invoice once they fill in the details in the pre-defined field. Every expense they create will have a unique expense # that eases the expense tracking action.

Duplicating Expense

It is easy to duplicate the expense with a simple duplicate as an option. Make a copy of your expenses in a minute.

Third Party Integration

Moon Invoice integrates with various software like Integromat, Zapier, Public API, WooCommerce, and Gmail Add-Ons. Additionally, it is possible to connect a Gmail account and an Outlook account.

Sort By

It is easy to sort various expenses based on date, expense #, name, first name, last name, category, ascending and descending form.

Categorize Expenses

Categorizing your expenses opens up new ways to track your expenses easily. Using Moon Invoice, you can categorize your expenses into utility, insurance, travel, maintenance, wages, and supplies.

Final Statement

How to record expenses without receipts? We have covered all the satisfactory guides to this question. However, it is not advisable to ignore the receipt and its value. It is crucial to have a proper record of receipts, invoices, and other relevant documents for smooth expense management and taxation.

Additionally, switching to a digital concept is a good move. Utilize an online receipt maker or expense management software for a systematic record that smoothens the workflow.

Frequently Asked Questions