I use carbonite to back up my computer files, so even if my records and computer burn down, I have the records stored online. The originals and the print out go with my tax records. I highlight and note the deductible items and their category. Then I print out the page as well as save it to my computer. I put as many receipts as I can on the scanner bed and scan them. That said, since I started day care last year, I think the chance of an audit is higher than my previous business, so I’ve started backing them up, not so much against fading but against fire or tornado. I store each month in an envelope, then the envelope in a plastic storage bin in the dark attic. lists many (called NeatReceipt or ScanSnap), most of whom cost less than $200 (deductible!).ĭo you use a scanner, and if so, how satisfied are you with it?įor more information about record keeping, see my book Family Child Care Record Keeping Guide.
There are a number of scanners on the market. Note: some states may not accept scanned records, so check with your state department of revenue before throwing away the hard copies your records. If you use a scanner, be careful not to throw away receipts until you are positive that they are properly scanned and saved on your computer. I recommend saving your scanned records on a flash drive and storing your flash drive in a safe place (such as a safe deposit box). You will need to be able to produce your scanned records at an audit. IRS Revenue Procedure 97-22 says you can throw away records after you have scanned them into your computer. If you scan your receipts, do you still need to save the hard copy for three years? No.
Using a scanner will not allow you to divide one receipt into two categories, so it’s not a perfect way to organize your records. You can then sort these records on your computer by putting them into different business categories (parent payments, toys, supplies, utilities, etc.). A scanner allows you to scan your receipts into your computer, by saving the image of your receipts. I previously wrote an article ( “The Case of the Fading Receipt”) discussing ways to preserve receipts when they don’t last three years.Ī growing number of child care providers are using a scanner to save and organize their records. Some states require you to save your records for longer than three years. Not if you had scanned your receipts into a scanner and can display your records on a computer or print them out.Ĭhild care providers are required to save their tax records for at least three years after filing their tax return (employment records must be saved for four years). As you pull out your receipts, you discover that the ink on all of them has faded and the pages are blank! It’s a family child care provider’s worst nightmare: You are in an IRS audit and the auditor asks to see your business receipts. Must You Save Receipts if You Use a Scanner? Home › Record Keeping & Taxes › Record Keeping › Must You Save Receipts if You Use a Scanner?