Ok, so I have thousands of receipts from shops that I've been stacking for years. Here is my current thought and it might not be the same scenario for everyone else.

All the MSCs that present me 1099s, ONLY put the fees into the 1099. So it's not like I really even get a chance to use the receipts against the income since it was reimbursed by them. Even if I get pulled for an audit - the receipts I've retained wouldn't play into any evidence for deductions.

So I want to throw them out. Stupid idea or can anyone think of reason why I'm still retaining/filing them away?

General rule is 7 years. After that, toss them.

I too have all my receipts. Actually, if you are audited, the receipts are the proof you need (for example, for mileage -- yes, I drove 3 days that week through Kansas, Oklahoma, and Texas. Here's the shops, here's the income, here's the receipts. Done, done, and done!).

My receipts are only a couple thousand for each year. So far, each year fits into one box.

Since I have a picture of the receipt, I trash them after the report is submitted. I get rid of the pictures after 3 months.



Edited 1 time(s). Last edit at 02/22/2020 06:35AM by HonnyBrown.

Do you have digitized copies? If so, the easy answer is you’ll be OK without the paper copies...

Now to veer a little off topic, this is completely out of the norm, but I’ll speak to it anyways: I typically throw out physical receipts after five or so years. But as for digitized copies? I keep everything. Not only do I maintain records and an index for my mystery shopping work throughout the year, I keep everything just because it helps me track a full budget, track exactly how much I earn, spend, both in dollars and in rewards (with its cents per points or dollars per points conversion rate).

For all of the shops I perform, I have a worksheet I fill out while at the site.
After making a digital photo of my receipts for that particular shop, I staple them to that worksheet for that shop. All of the worksheets for the shops performed for the particular month are filed into a folder dated for the month and year (example: February 2020 for all shops I did this month).
The digital copies are deleted after I perform the same shop again.
So, sometimes they might be on my computer's hard drive for only a month or so or, in some instances permanently.
Payment records for those shops are also filed into the folder.
The hard receipts are kept along with the worksheet that they are stapled for 7 years and then disposed of.
I keep those records in a file cabinet along with my tax information.

Are receipts that old even readable anymore?

I keep a digitized copy of the report, receipts, and payment on my computer. It is labeled by year. I keep the last two years on my computer for reference, and all previous years are on an external hard drive in the backup of my computer. I can go back to anything for the last 10 years if I have to. My goal each year is to reduce all my paper files.
FYI - my "working copy" of everything I do is actually on an external hard drive. Makes it so easy when I upgrade computers, have my computer repaired, have to take the files with me somewhere, of if the computer were to crash. It's not 100% full proof, but works well for me.

Those of you throwing out digitized receipts and keeping paper ones for 7 years, or even 3 years think again. I have had many receipts fade within little more than a year. So you might have a collection of little white pieces of paper if you get audited. I label all my receipt scans with the name of the msc and date so it would be easy to find them later. And they take up so much less room on my hard drive than in my physical filing cabinet. I do keep paper until after I file my taxes for the previous year.

I don't know what questions IRS might ask for proof of on audit. I anticipate that the most likely would be discrepancies between amount received and amount claimed as taxable.

If they start from my bank account deposit (direct deposit, Paypal transfer or check deposit), I need to be able to show what was taxable fee and what was reimbursements. With my spreadsheets I can reconstruct what shops were included in that deposit. Going to my quarterly file of paper receipts, which are in reverse date order because I always put receipts in the front of the folder, I can quickly retrieve the appropriate original receipt and can also pull the digital receipts to print if the originals are illegible.

Similarly, I can use my spreadsheet to show what shops were performed on a specific date, mileage, fee and reimbursement as well as when and how much I was paid/reimbursed. My spreadsheet, if you will, is the index to my shops and virtually any question about my business can be answered from it, while documentation can be gathered from paper or digital records.

Every couple of years I destroy receipts and collateral that are more than 5-6 years old.

I keep a copy on my computer and toss the paper ones after I have been paid. I really don't need a bunch of little, white receipts for seven years.

As a business, we need to keep some records "forever". This generally would be a 'book of first entry', which in the case of shoppers would be something like spreadsheets or calendars or whatever you consistently use to list your jobs, fees and receipts (as in payments received). Paper receipts from shops indeed fade and these days we no longer need to mail in receipts (yes, we had to mail them in a decade and more ago). Since we now submit them digitally, it makes sense to retain those digital receipts and after a suitable period of time, destroy the paper ones.

If you read your ICAs, you will find that different MSCs have different time periods for you to retain records. One company I used to work with required 2 years as they might be needed to document a legal action, while another indicated you could toss them once you were paid. It is not now, and never has been, my intent to revisit my receipts and collateral to determine what I can toss next month, what I can toss in 6 months, what I need to retain for 2 years, etc. A quarterly file (or monthly if you are collecting lots of receipts and collateral) is an easy way to keep the material accessible yet out of the way. When the files age a bit, I bundle them and throw them in a banker's box and when the box gets full, pitch the oldest bundles--which by then are 5-6 years old, which handles IRS requirements as well. About once a year my credit union has a 'shred day' and that is the time when I gather old financial records and old shop materials, shove it all in a box, watch it get dumped into the shredder and I am returned my box. That also assures that any confidential materials I may have printed from the MSC have also been discretely disposed of.

All of my digital records--both personal and business--are retained digitally and backed up to external drives with some frequency. 16 years of Mystery Shopping digital records--including narratives saved in Word, some shop instructions in pdf, site photos, digital recordings, spreadsheets, and digitized receipts all save handily on a small thumb drive, so it is not like I am wasting a lot of computer space.

Each of us has to organize our materials in a way that is intuitively 'correct' to ourselves because each of us is going to need to be able to locate our records if and when needed. I will not store my records on someone else's server (i.e. 'The Cloud') because there are potential ownership issues of those materials. My computer 'file system' is purely a 'KISS' system: A folder called "Mystery Shopping" that at its root has my spreadsheet for each year I have been doing this and the spreadsheet of companies with whom I am registered including user name and login (among other information). The folder then has subfolders for each company. At the root of that subfolder are the current year's work and folders for previous years' work. At the end of the year I create a folder for the year ending and move all loose documents into that so that I am ready for the new year's work for that MSC. For me, that is intuitive. For someone else that would likely be onerous.

I claim a lot of mileage so I like the fact the receipts can back up where I traveled. Also, you never know when you may need an alibi.

I create annual folders on my Google Drive. I move all my pictures there accordingly, including images of every receipt. There is also Microsoft One Drive. Apple, Samsung, Dropbox, and so on. Unlimited free resources to store images if you need them. I can access any if these cloud drives from my cell phone, home computer, anywhere I can log in.

In regards to a spreadsheet. I like it for tracking all the variables that seem logical, but I love the information that comes from data. The trends and pivots I can do to answer questions about what the reality is of my experience.
Wednesdays are my lowest earning days and I have a certain street of my hometown that brings me in the most business by volume and dollar types.

What is everyone's most visit store or brands across all MSCs? Sam's stands out as my top place to do shops.

I don't even know what a Sam's is.

Long term, I have my database with all shop info including fees and milage. I also save a PDF of all reports except MF and one other because I can't find a way to save with their system. The reports all have a copy of the receipt in it so I thought I was good but when I went back to one recently I noticed the receipt image wasn't clear enough to really read the amount. I do save the photos of the receipts as well but not labeled or sorted in any organized way to find anything. I really need to rethink my technique.

I scan mine once I get paid. I used to use Quicken, but they've gotten too expensive for me. I just name the files with the date, a general name, and then an individual identifier. EX: 2020-02-23 Helios 1a zip code

@wwin wrote:

Long term, I have my database with all shop info including fees and milage. I also save a PDF of all reports except MF and one other because I can't find a way to save with their system. The reports all have a copy of the receipt in it so I thought I was good but when I went back to one recently I noticed the receipt image wasn't clear enough to really read the amount. I do save the photos of the receipts as well but not labeled or sorted in any organized way to find anything. I really need to rethink my technique.

My phones camera settings use the current time/date stamp to name the file. This way they are always easy to find and in order.

@Dongjuan wrote:

In regards to a spreadsheet. I like it for tracking all the variables that seem logical, but I love the information that comes from data. The trends and pivots I can do to answer questions about what the reality is of my experience.
Wednesdays are my lowest earning days and I have a certain street of my hometown that brings me in the most business by volume and dollar types.

What is everyone's most visit store or brands across all MSCs? Sam's stands out as my top place to do shops.

In terms of frequency, I've had the most expenses at Dunkin' Donuts and other coffee shops due to the $1 off coffee shops coupon on CashApp.

I agree; it's interesting to aggregate your own spending habits, track your burn rate, etc.

I am interested to know if any of you ever got audited for your Mystery Shopping business. If so, don't be shy. You do not have to give the particulars but let us know what type of information they asked you to present, how intrusive they were and if they were easily satisfied with the types of things we are all trying to save...receipts mileage, locations etc. Thanks

Well, I do know one thing do not ever abbreviate when doing IRS files they do not like that. I had done that several years ago and am still fighting them about it. ut after going back over the files I found another $1000 to claim for a bigger refund.

Sandy, there was a thread or two a year or so back where a shopper got audited and his mileage deduction was disallowed because he didn't have adequate records.

@ceasesmith wrote:

I don't even know what a Sam's is.

No Sam’s Club in your area? It’s a competitor to Costco and is owned by Walmart.