What to keep, and for how long
- Receipts and invoices for every deduction (merchant, date, amount, items).
- A mileage log with dates, miles, and business purpose for each trip.
- 1099s, bank and platform statements showing your income.
- Proof of business purpose, a quick note on why each cost was for work.
Keep all of it for at least three years from your filing date (the usual audit window), longer for big-ticket or property-related items.
What an IRS audit of a 1099 filer looks like
Most self-employed audits are not the dramatic in-person kind. The common one is a correspondence audit: a letter asking you to substantiate specific deductions, usually the big or unusual ones like a large home office, heavy vehicle expenses, or meals and travel. You reply by mail with copies of the receipts, invoices, and logs that back up the numbers on your Schedule C. If your records match what you filed, it closes quietly. The problems start when you cannot produce the proof, which is why organized records matter far more than how aggressive your deductions look.
What happens if you lost a receipt (the Cohan rule)
A missing receipt is not automatically a lost deduction. Under what is known as the Cohan rule, the IRS may allow a reasonable estimate for an expense you clearly incurred, as long as you have some credible evidence (a bank or card statement, a calendar entry, a vendor email). But there is a big exception: travel, meals, vehicle, and other "listed" expenses require strict substantiation and generally will not be allowed on estimates alone. The safe approach is simple: keep the actual receipt for everything, because you cannot rely on the Cohan rule for the categories the IRS scrutinizes most.
Records to keep by expense type
- Mileage: a contemporaneous log with date, miles, and business purpose for each trip, plus your total annual mileage.
- Meals and travel: the receipt plus a note of who you met and the business reason; for travel, the itinerary and lodging receipts.
- Home office: the square-footage calculation and the utility, rent, or mortgage-interest bills behind the percentage.
- Equipment and assets: purchase receipts kept for as long as you own the item plus three years, since depreciation spans multiple years.
- Everyday supplies and software: the receipt or card statement and, ideally, the itemized invoice.
The easy way to stay ready all year
Audit-ready records are far easier to keep when you never let them pile up. Snap or forward each receipt the moment you get it, and let the app store the image, category, and details. NeoReceipt keeps every receipt image searchable by merchant or category and logs your mileage at the IRS rate, so if a letter ever arrives, you are not digging through a shoebox, the proof is already organized and exportable.
Be audit-ready without trying. Capture your first 10 receipts free.
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