Do you need receipts for tax deductions? The $75 rule and what actually counts as proof

#The short answer

You do not always need a receipt. You always need a record. Those are different things, and most of the confusion on this question comes from treating them as the same.

A receipt is one kind of evidence — usually the best kind, because it shows what was bought, from whom, for how much, and how much tax was charged. But the tax rules in every country covered here are written around proving an expense, and they allow other evidence to do that when a receipt is small, lost, or was never issued.

#United States: the $75 rule

IRS Publication 463 draws the line in one sentence. Documentary evidence — a receipt, cancelled cheque or bill — is ordinarily not needed if the expense, other than lodging, is less than $75. Lodging is the exception: a hotel bill is required whatever it cost.

What the rule does not remove is the requirement for adequate records. For every business expense, receipt or not, you must be able to show:

Element	What it means	Where it usually comes from
Amount	What it cost	Receipt, statement
Time	The date	Receipt, statement
Place	Where, or from whom	Receipt, statement
Business purpose	Why it was for the business	You. No document supplies this.

That last row is the one that decides audits. A $40 lunch is under the threshold, so no receipt is required — but "lunch, 14 March, $40, Café Roma" is still not a deductible record until you add "with J. Ortiz, discussed the Q2 contract". Publication 463 also asks that records be kept timely: written down at or near the time of the expense, not reconstructed months later.

#What a bank statement proves

A card or bank statement is documentary evidence of three of the four elements: amount, date and payee. It is silent on the fourth — purpose — and it says nothing about what was actually purchased or how much of the total was tax.

For a small, routine expense that is often acceptable, combined with a note of the purpose. For anything larger, anything mixed (a shop where you bought both office supplies and groceries), or anything that involves sales tax you want to reclaim, the statement is not a substitute for the receipt.

The statement says you spent $212 at an office supply store. The receipt says which $212. If an examiner asks, only one of those answers the question.

#When the receipt is lost

Two things to know. First, you cannot guess: Publication 463 states that you cannot deduct amounts you approximate or estimate. Second, a lost receipt is not a lost deduction, because the same publication has a rule for incomplete records. Where you lack complete documentation for an element of an expense, you can establish it with:

• your own written statement containing specific information about that element, and
• other supporting evidence sufficient to establish it — a card charge, a calendar entry, an email confirming the meeting, an invoice from the other side.

The standard is evidence, not paper. A card charge for $84 at a restaurant, a calendar entry for a client lunch at that restaurant on that day, and a note of who was there and why is a defensible record without the receipt. Reconstruction from memory alone, months later, is not — Publication 463 reserves genuine reconstruction for records lost through fire, flood or other casualty.

#Gas receipts, medical receipts, and other special cases

Gas receipts. If you deduct car costs using the standard mileage rate, fuel is already inside the rate and the receipts are irrelevant; what you need is a mileage log. If you use actual expenses, or think you might switch to them for this car, keep them.

Medical expenses. The $75 rule is written for business travel, meals and car expenses. For itemised medical deductions, keep the provider's bill or receipt and proof of payment; there is no small-amount exemption to lean on, and the amounts add up over a year.

Charitable gifts. Cash gifts of any amount need a bank record or a written acknowledgment from the charity; gifts of $250 or more need the written acknowledgment specifically. Different rule, different chapter, same principle — the record has to exist.

#United Kingdom

HMRC's position for the self-employed is direct: keep records of all business expenses, including the receipts, and keep them for at least 5 years after the 31 January submission deadline of the tax year they belong to. There is no formal small-amount exemption; a claim you cannot support is a claim that can be disallowed.

VAT adds a second layer. To reclaim input VAT you need a VAT invoice from the supplier, not just proof of payment. For supplies of £250 or less a simplified VAT invoice is enough — the retailer's name, address and VAT number, the date, a description, the total including VAT, and the VAT rate. Most till receipts from VAT-registered shops already are simplified invoices. Without a valid invoice HMRC can refuse the input tax, and a card statement will not rescue it. VAT records are kept for 6 years.

#Australia

The ATO uses a threshold in the other direction. If your total claim for work-related expenses is $300 or less, you do not need receipts — but you must still be able to show how you worked out the amount. Once the total goes above $300, you need written evidence for the expenses (a receipt, invoice or similar document showing the supplier, amount, nature of the goods, date paid and date of the document). Records are kept for five years, and a clear photograph of a receipt is acceptable evidence.

#Canada

The CRA expects supporting documents for the expenses you claim and requires records to be kept for six years from the end of the tax year they relate to. Electronic records must be kept in an electronically readable form for that period — a scanned or photographed receipt counts, but the file has to still open in year six.

#The record that survives all four

Across the IRS, HMRC, ATO and CRA the same four facts keep appearing: what it cost, when, where or from whom, and why. A receipt supplies three of them. The fourth is yours to add, on the day, while you still remember. Do that consistently and the question of whether you needed the receipt stops mattering — you have the record, and the receipt is a bonus.