Ever wondered if you can dispose of those receipts you’ve got tucked away? Well, hold your horses because according to the Bureau of Internal Revenue, you should keep your paper receipts for over 5 to 10 years. It’s the implemented rule by the Bureau of Internal Revenue for the electronic storage of documents.
According to the Revenue Regulations (RR) No. 17-2015, all taxpayers must preserve their books of accounts (subsidiary books and accounting records are included) for a period of ten years. But why does a piece of paper matter so much? Read below to find out.
1. Solid Proof of Purchase
Machines, like people, commit errors as well. Although we find technology highly reliable these days, you should still keep your receipts and other important documents in your back pocket just in case. Ever since the rise of online transactions, scams, unwanted charges, and identity theft are becoming more and more common. But with a solid proof of purchase at hand, you have a supply in your arsenal to shield yourself these digital crimes.
2. Monitoring Expenses or Financial Progress
Receipts serve your future expenses as well. When you keep those tax returns, you’ll be able to track your financial progress and see the pain point your budget is always suffering from.
You’ll be able to see how much you’ve spent on your milk tea cravings, shopping, and more and the results might surprise you enough to keep you from overspending again. Because even though you spend a little each day on unnecessary stuff, it accumulates into a large amount you could’ve spent elsewhere like your rent or a new investment.
3. Prepare Tax Returns
Of course the primary reason behind keeping receipts is for the annual tax return filing every April 15th of the year. That’s the time you can bust out your receipts and payslips for your income and excise tax returns.
It’s a discipline for all Certified Public Accountants to keep their records or financial statements tucked safely in order, as to avoid confusion among their piles and piles of paperwork from different clients.
So accountants, you better ready those extra filing cabinets because each paperwork you hold is gonna stick around for a long time.
As for regular taxpayers, under RR 5-2014, you can dispose of the hard copies of your records for the first five years of the prescribed period. Or better yet, store electronic copies of your receipts and other financial records just in case. You’ll never know when you might need it again.
Keeping documents for that long can pose as an inconvenience, especially when documents you urgently need gets mixed up elsewhere. It takes up space and even consumes time for organizing and re-organizing over the years.
That’s where JuanTax comes in. We make storing and organizing digital receipts easier in just a few clicks for accountants and taxpayers alike. With a JuanTax account, you can track down years of your records (No more bulky paper files!) while managing your taxes. You can even directly get 17 official tax forms from our website and mobile app.